The Independent Invention Defense

Suzanne Scotchmer summarizes the argument for independent invention defense against patent infringement - a defense that is currently not allowed. Its introduction would address one of the patent system's seminal problems: that two or more inventors can arrive independently at the same invention, either simultaneously or within a certain timeframe of one another, without any knowledge of the work of the other. Is it fair for the first to exclude the other?

If ... independent invention is a valid defense to infringement, the patentholder has an incentive to limit its own market power, resulting in a lower price. This occurs because the independent inventors can enter the market (e.g., by developing products in “clean rooms”). Faced with the threat of entry, the patent holder may choose to license some potential independent inventors, saving them the cost of independent invention. The increased competition works to lower price.

As I see it, this would kill three birds with one stone: First, it introduces market pricing into licensing (where currently we have monopoly pricing). Second, it introduces a fairness for inventors into the system that was lacking beforehand -- a right to create, if you will. Third, it improves patent quality; patents covering obvious ideas will be of virtually no value, since the independent invention defense will likely exclude them from ever receiving substantial royalties.

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