TARA’S PATENT LAW OUTLINE-SPRING 2012INTRODUCTIONI.Introduction to Patent Lawa.Why have patent law? Patent law and tax law are two areas that have a sweeping beneficial aspect. i.Similar to trade secret law: The government encourages trade secrets through agencies such as NIH, NASA, and universities. Patent law is similar in that it encourages investment in research and development. ii.Patent law is ENORMOUSLY in flux:1.Congress is considering major rewrites to the Patent act2.The Supreme Court is hearing more important patent cases3.Why is it in flux?: People are questioning whether patent law at the moment is actually encouraging research and development spending. Are the procedural aspects of patent law efficient to get problems resolved correctly? b.Constitutional Power: Article 1, Section 8, Clause 8: “ the Congress shall have the Power... to promote the progress of science and useful arts, bysecuring for limited times to authors and inventors of the exclusive right to their respective writings and discoveries.”...i.Purpose: To promote the progress of science and useful artii.How:giving limited times of exclusivity to authors and inventors. 1.Why not give cash?: Often governments give grants or announce prizes. NASA, for example, will give money to the first group who gets to Mars. What the patent holder here does if for a limited time give exclusive rights to a patent holder. II.Important Themes in Patent Law: a.Free Market Determines Value of Patent: We leave it up to the market todetermine the value of rights. The purpose of patent law is to determine whether an invention is truly new or not, and then the market determines whether you used good judgments. i.Both Copyright/ Patent/ Property law all allow this same reaction to occur. ii.Patent law requires anticipating the market’s reaction to an invention: Once an exclusive right exists, buyers will decide whether or not to buy and sellers will decide whether or not to sell. b.The Patent System Avoids Free Riding: To create a patent, the patent holder must (1) do the original work and (2) tell people about his or her findings. It takes both time and money invested to come up with something new. i.In the absence of the patent system, the concern would be that NO ONE would go after certain inventions. If someone decides to put down a billion dollars for an invention, and no exclusive right was granted, other people would start using it and the investor would havedifficulty in making back money. 1.Patent law does not want the actual creators to be systematic losers.