Continental Paper Bag Co. v. Eastern Paper Bag, Patent law, Tangible property, Patent trolls, Remedies
Intellectual Property Law
In Continental Paper Bag Co. v. Eastern Paper Bag Co., the Supreme Court held (1) that patent owners have an absolute right not to practice their patent and (2) that even these nonpracticing patent owners are entitled to the liberal use of injunctive relief against infringers. Both of these holdings have been very important to the viability of patent assertion entities, the so-called patent trolls. In eBay Inc. v. MercExchange, L.L.C., the Supreme Court softened the injunction rule. In this Article, we argue that Congress or the Court should reconsider Continental Paper Bag’s embrace of an absolute right not to use, not because patents are not property but because the considerations at work within both property and patent law do not support recognizing such an unbounded right not to use. The Court’s endorsement of a robust right not to use patents was based on an overly simplistic analogy to tangible property, which the Court characterized as recognizing “the privilege of any owner of property to use or not use it, without question of motive.” The Court’s reasoning was flawed in two respects. First, the law of tangible property distinguishes among nonusers, penalizing owners whose nonuse interferes with other owners’ use of their own property or induces others to waste time or effort appropriating the unused property. With respect to these derelict nonusers, the law employs numerous doctrines, such as nuisance, undue hardship, estoppel, abandonment, adverse possession, and permissive waste, to ensure that owners’ decision not to use their property does not inflict harm on others. Second, the Court in Continental Paper Bag failed to consider the ways in which the reasons for recognizing a right not to use might differ in the contexts of patent and tangible property. Although the same basic considerations are potentially at play in both contexts—efficiency, autonomy, and personhood—the implications of nonuse differ in the patent context because of information’s nonrivalrous nature and because of the particularly powerful way that patent law constrains the freedom of nonowners. Taking these factors into account suggests that the first order normative case for recognizing a robust right not to use a patent is weaker than in the domain of tangible property. This is especially true when nonusing owners attempt to enforce their patents against independent inventors. As a consequence, in cases brought against independent inventors, we suggest making patent remedies contingent on a patent owner’s efforts to disseminate their inventions. Recognition of such an obligation to use in patents would significantly reduce the threats posed by patent trolls and the high-tech patent wars.
Liivak, Oskar and Peñalver, Eduardo M., "The Right Not to Use in Property and Patent Law" (2013). Cornell Law Faculty Publications. 639.
Published in: Cornell Law Review, Vol. 98, No. 6 (September 2013).