The document discusses whether inventors should be required to "work" their patents by practicing the patented invention. Currently, U.S. patent law does not require working patents, which has led to a rise in non-practicing entities (NPEs) that do not practice inventions but seek licensing fees. Debates around requiring working patents center around balancing the natural rights of inventors versus benefits to society and reducing patent trolls.

1. SHOULD AN INVENTOR BE REQUIRED TO “WORK”
THE PATENT?
Heather Hildreth
Department of Engineering & Society
STS 2160
December 30, 12
mandated the working of
the patent grant. The
Current U.S. Patent Law American Patent Act of
1790, provided what are
A patent, in the United States, is an now referred to as
exclusive right to make, use, or sell an “importation patents,”
invention or allow others to do so. An which gave Americans
inventor is awarded a patent in the U.S. monopoly rights to import
patent system if his invention is new, foreign technology, without
useful, and non-obvious. Generally, the any obligation to protect
patent’s survival is not foreign
contingent on whether Working the patent is not inventors’
or not the inventor puts explicitly required in current rights.
his patent to use or
U.S. patent law, but it is a major
allows others to do so. While working the
The requirement of part of legislation in other patent is not
“working” the patent or countries. explicitly required
compulsory licensing, in current U.S.
however, is a fundamental aspect to many patent law, some argue that parts of it are
other patent systems; for example, many still alive today in some of the laws.
European countries have such a Paraphrasing Barnett (2010, n.p.), the
requirement, and Wood and Davé note working requirement shows up in the
that an inventor’s failure to work the Bayh-Dole march-in provisions, which
patent in a certain amount of time is allow the government to grant a
grounds for a compulsory license in compulsory license if a federally funded
China, Japan, and India (n.d., n.p.). invention is not worked in a certain
Working the patent and amount of time; and in the maintenance
compulsory licensing are an important fees required by a patentee every 5 years,
part of the history of patent regulations. which are supposed to encourage the
Halewood 1997, p. 251 summarizes the patentee to make use of his patent.
significance:
The earliest discovered Glossary
patent legislation, the “Working” the patent: Putting the patent to use by
Venetian Patent Act of practicing the patented skill; either by making
1474, required the active (manufacturing), using, or selling the invention
exploitation of patents; Compulsory Licensing: A license granted by the government
otherwise, they were to someone other than the patentee allowing him to make,
cancelled by the Venetian use, or sell the invention
state. Likewise, the English
Non-Practicing Entity (NPE): A patentee that does not
Statute of Monopolies, 1623 practice his invention by making, using, or selling it
Patent Troll: An NPE that seeks out others infringing on its
patent with the intention of working out a licensing
arrangement or taking the possibly infringing party to
court

2. However, these regulations are hardly around to technology companies
sufficient in preventing the consequences demanding money to license these
that come from the lack of that patents” (n.p.).
requirement. Whether NPEs are good or bad,
they are on the rise in the states. Colleen
Non-Practicing Entities (NPEs) Chien (2010) found that the percentage of
and other Consequences from infringement suits involving NPEs rose
from 22% in 2000-2001 to 36% in 2006-
this Lack of Requirement
2008, counting defendants, or from 10%
to 20% counting cases (n.p.).
NPEs
Since patentees are not required to
work the patent in the U.S., there are
many non-practicing entities (NPEs) that
own many patent rights, but do not
practice the patented skill, keeping the
usefulness of the invention from the
public. Many NPEs are not purposely
trying to keep the public from a useful
invention; paraphrasing Papst (2010),
smaller inventors, companies, and
universities do not have the resources to
successfully manufacture their invention,
and bigger companies sometimes choose
The rise in Patents; Patent Pools and
to abandon a field in order to compete in
Clearinghouses
a different market (p.10).
However, many NPEs purposefully
How is a small company to know it
do not practice the invention in favor of
is infringing on a patentwhen the
preying on possible infringers, who may
corresponding invention isn’t publicly
not even know they are infringing. These
practiced? Not only is there a rise in NPEs,
NPEs have earned the label of “Patent
but there is a rise in patents in general,
Troll” in the U.S. Consider Nathan
according to the USPTO’s U.S. Patent
Myrhvold’s company Intellectual
Statistics Chart. Due to the rise of patents,
Ventures, exposed fairly recently in
particularly software patents, Lee and
Planet Money’s Program “When Patents
Mulligan (2012) estimate that, in the
Attack” (2011).Accoding to the program,
widget industry alone, “in which 30,000
Myrhvoldstates that that “It [Intellectual
Ventures] gathers patents together into a
huge warehouse of inventions that Glossary
companies can use if they want. It's sort Patent Pool: an agreement among
of like a department store for patents” patentees to license patent rights to one
(n.p.). The program then notes that some another and third parties
consider it a troll because “Intellectual Patent Clearinghouse: an agency that,
Ventures has amassed one of the largest with a patentee’s permission, sets license
patent portfolios in existence and is going terms to others who would then be
permitted to use the patent

3. firms had one patent apiece and could
review one patent per hour, each firm Consequences from Requiring
would need to hire around 15 full-time Inventors to Work the Patent
patent attorneys, for a total discovery cost
of almost a billion billable hours” (p. 7). Since many countries in Europe
Most small companies do not have the have a requirement to work the patent, it
time or resources to check if they are would be beneficial to compare the
infringing. While this is a problem due activity of NPEs in Europe with that of the
more to the amount of patents than the NPEs in the U.S. Summarizing the findings
number of NPEs, requiring inventors to of Fusco (2012), while NPEs exist in
work the patent would result in more Europe, their role is significantly less than
invalid patents and thus fewer patents on those in the U.S., and as a result, they do
which a practicing party could infringe. not get nearly the same amount of media
Additionally, the Shield Act (2012) helps attention. It is important to note that
to protect companies while an NPE can
involved in software Requiring the inventor to legally sit on its rights
patent cases in suits
against NPEs
work the patent results in in the U.S., those in
Europe must license
by requiring less NPEs. patent rights to others;
unsuccessful so, not only are there
plaintiffs to pay for the litigation costs of less NPEs in Europe than in the U.S., the
defendants. ones that do exist allow society to benefit
In order to further secure from their invention because it is
themselves against infringement suits, ultimately being “worked” by someone.
companies sometimes create patent pools Citing Papst, 2010, p.14:
and patent clearinghouses. A patent pool,
as defined by Nielson and Samardzija That said, in general
(2007), “is an agreement or contractual there seems to be a strong
arrangement between two or more focus on quality patents
patentees to license their patent rights to among European NPEs. The
one another and third parties” (530), and goal for most is not to
a patent clearinghouse “administers the threaten infringers and
rights of several patent owners. Authority collect litigation avoidance
by the patent owner is granted to the fees, but instead to
agency to set license terms to others who participate in the success of
would then be permitted to use the a valuable technology
patent” (532). Nielson and Samardzija covered by patents that
note that the problem with patent pools is they own or administer on
that “To be effective, however, patent licence.
pools must typically serve a clear
technological platform. Unfortunately, It is clear, then, that requiring an
this is often missing” (531) and that the inventor to work the patent, i.e., practice
problem with patent clearinghouses is it, will lead to less NPEs. This
that “an entire industry must agree to consequence explains why opinion on a
participate, which requires government requirement to work the patent is highly
intervention”(532).

4. Glossary
Natural Rights Theory: The view that
inventors deserve a significant reward for stresses the rights of the inventor, while
invention the bargain theory stresses the benefits to
Bargain Theory: The view that society society that come from the invention.
deserves to benefit from an invention
correlative to opinion on the benefit of Opposed to Requiring a Working
NPEs and patent trolls. of the Patent
The Two Patent Protection Those that are opposed to
Theories requiring inventors to work the patent
are most likely to believe in the natural
Everyone can agree that the rights theory because an inventor should
ultimate goal of the patent system is “To be able to decide what he does with his
promote the Progress of Science and intellectual property; he isn’t obligated to
useful Arts,” as stated in Article I, Section disclose the invention in the first place, so
8, Clause 8 of The Constitution, but there he shouldn’t be obligated to practice it.
are disagreements over how to best reach Supporters of the natural rights theory,
that goal. Summarizing Chapter 1 of for the same reasons, are against
Intellectual Property-Patents, compulsory licensing, as it should not be
Trademarks, and Copyrights in a Nutshell the government who decides who has
by Miller and Davis access to the rights
(2012), there are The debate on requiring patentees of a patent.
two basic theories as to work their invention boils down Additionally, those
to how to promote to a debate on the role of NPEs, and opposed are also
innovation. The most likely to
ultimately, to the two theories of believe that NPEs
“natural rights” patent policy.
theory is the view do not negatively
that in order to affect the patent
encourage inventors to invent, they system, and that there should be more of
deserve the rights of any product that is a focus toward reforming other aspects of
the result of their hard labor; that is, they patent policy instead of a focus toward
deserve to be the ones to get rich off of reducing NPEs.
their invention, especially after diligent Summarizing Geradin (2011),
and laborious research and development. NPEs should be seen as neither good nor
Supporters of the natural rights theory bad, and can in fact increase innovation
believe that without significant rewards by becoming a competitor in the patent
granted to the patentee, inventors would business- that is, by getting to certain
be less motivated to work towards claims or inventions first. He finds that
inventions. The “bargain” theory is the more investigation should be done on the
view that inventions are only beneficial if effects of NPEs on the economy and
society benefits, so in patent system before
NPEs “purchase patents from labeling them as bad.
order to encourage those who do not have the
inventors to disclose Schwartz (2012) goes
resources or expertise to take so far as to say that
their invention, they are their patented technologies to
offered a fair reward. NPEs are good, claiming
market” –Schwartz (2012) “They purchase patents
The natural rights theory

5. from those who do not have the resources defendant, who many times is… without
or expertise to take their patented enough resources to fight”(n.p.).
technologies to market such Quoting the abstract of
“NPE lawsuits are
as individual inventors… “The Private and Social Costs
associated with half a
Thus, NPEs create of Patent Trolls” from Bessen
trillion dollars of lost
opportunities, perhaps the and Meureur (2011):
wealth to defendants
only opportunities, for non-
from 1990 through
manufacturing patentees to NPE lawsuits are
2010” –Bessen and
monetize their patents” associated with half a
Mesurer (2011)
(n.p.). trillion dollars of lost
Summarizing Barnett wealth to defendants
(2010), NPEs like research universities from 1990 through 2010,
should not be discouraged by a mostly from technology
requirement to work the patent, and he companies. Moreover, very
believes that if there were to be such a little of this loss represents
requirement, universities should be a transfer to small
excluded. inventors. Instead, it
implies reduced innovation
In Favor of Requiring a Working incentives.
of the Patent
It should be noted that some see this
Those in favor of requiring study as controversial; paraphrasing the
patentees to work their invention are findings of Schwartz (2012), that number
most likely to support the bargain theory, is more like $6.7 billion, and more
because the bargain theory stresses the research is needed to compare that to the
benefits of invention to society, and cost of litigation between practicing
working the invention ensures that entities.
society is able to see it (and possibly use Believing that requiring an
it) in some form other than a published inventor would solve this problem,
patent document. In support of the Posner (2012) notes that making “a
bargain theory, Yosick (2001) believes patent contingent on producing the
that compulsory licensing “would product or process…within a specified
promote the public interest without time” would “reduce the troll problem, by
detrimentally affecting the incentive to clearing out patents that are obtained to
invent and to disclose inventions” (1277). extort license fees” (n.p.).
Those in favor will also seek to rid
the patent system of what they see as Finding a Solution
patent trolls, as they believe that the
inventor should not sit on his invention, Figuring out whether working the
nor profit from unreasonable licensing patent and compulsory licensing should
fees. Gene Quinn (2010) blogs that patent be a part of U.S. patent legislation comes
trolls are “patent vampires” who down to figuring out the role of NPEs and
“increasingly instituting a strategy of sue ultimately picking one of the two patent
everyone you can…This just shifts the policy theories. Those that favor the
burden of due diligence onto the natural rights theory will want to allow

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