Giachino (00:05.0050 - 00:50.0220)
Welcome to IP Protection Matters. I'm your host, Renee Giachino. Today, we are joined by Professor Adam Mossoff. Professor Mossoff teaches at George Mason University School of Law. It's actually the Antonin Scalia Law School at George Mason University. He teaches a wide range of courses at the Law School, including property, patent law, trade secrets, trademark law, remedies and internet law. He primarily researches and writes on patent law and innovation policy. He joins us today to talk about the historical and Constitutional foundations of patent protection among many other topics that hopefully we will dive into very briefly today. Thank you so much for joining us. I appreciate it.
Mossoff (00:50.0610 - 00:52.0569)
Thank you, Renee. It's a real pleasure to be here.
Giachino (00:53.0310 - 01:30.0419)
We have been talking quite a bit with some other folks who have a strong interest as you do in IP protection. We really wanted to dive in today with you because I know this is your area of strength and expertise.
In the United States, we lead the world in protecting intellectual property and these protections are vital to our economy. We all know that. If you could go back in time for us and help us better understand, how did we get here and what is the historical foundation of patent protection?
Mossoff (01:31.0029 - 03:45.0820)
Wow, that's a great question. It's a big question. I guess I'll have to resist being too much of an academic and going on for a very long time. So I won't go all the way back to Ancient Greece or anything like that. But I will start with the Founding Fathers. They recognized the importance of intellectual property. They saw intellectual property largely as the same type of property right that arose from the creation of any other type of property right. Farmers, manufacturers and day laborers engage in productive labor.
As John Locke explained, and the Founders learned from him, those who create new values in the world through their productive labors have a right to those roots as property rights. The Founders recognized that inventors and authors engaged in the same type of value-creating, productive labor - intellectual labor it was later called. They recognized the importance of protecting this. So they placed it in the Constitution.
This is the very first time in human history that intellectual property, specifically patents and copyrights, are actually recognized as needing enforcement - and a government has authorized the protection of these rights in a country's founding document. In fact, what we now call it the copyright and patent clause - it is Article I, Section 8, Clause 8, which is the section that authorizes Congress to secure the exclusive right to authors and inventors - that is the only place in the Constitution proper, the Constitution that was drafted in 1787 before the Bill of Rights was added to it, where one will even find the word “right” used. It is a very, very significant provision historically and it is very significant as we know in the history that followed because everything that arose from it - our explosive growth and innovation economy - is rooted in that foundation.
Giachino (03:46.0619 - 03:54.0889)
Is it fair to compare a patent right to a title deed in land? Is that a fair comparison?
Mossoff (03:55.0460 - 05:58.0700)
Not only is it fair, it's entirely right and correct, legally and factually. In fact, the early courts immediately made that identification. I have now read and reread all of the patent decisions in federal courts between 1790 and 1880 or 1882. There is approximately 1500 of them.
I can say that I was poked fun at by a sitting Senator. When I was testifying before the Senate a couple of years ago on patent policy, I mentioned the importance of securing patents as property rights with injunctions. I realized I had to establish my credibility for this. I mentioned that I had reread all of the patent decisions from the early 19th century and Senator Coons said, “you really need to get out more often.” It was a delightful moment. Well, that's how I know I'm doing exactly what I should be doing because I love this stuff.
So, I can personally attest as I have written on this and published my research on this that early courts referred to patents as title deeds. In fact, the formal legal claim for patent infringement was originally called trespass on the case. It was a special type of trespass action. They referred to patent infringement as trespass both as a legal matter and rhetorically and they even used very strong property rhetoric at times referring to infringers as pirates or as committing a fraud on patent owners and the public through their theft of someone's patent rights and their inventions.
Giachino (05:59.0200 - 06:20.0725)
That's interesting because that takes us to a common term today - when we talk about piracy and people pirating intellectual property rights. There is long-standing legal court precedent for using that term as well as you indicated, probably not in all 1500 cases, but certainly many of them. Isn't that right?
Mossoff (06:20.0934 - 07:34.0480)
A significant number. Yes. Obviously there were some judges here and there who disagreed with this framing. Some judges took a position that was closer to the original view of England and countries before that who believed that patents were special monopoly grants conferred upon people as a special privilege. In England, it was a privilege granted by the crown.
But this was not the dominant approach. Obviously there's always been a robust policy debate about these issues, but the dominant approach in the law and the approach that was embraced by an overwhelming majority of justices on the Supreme Court, judges and even legislators and commentators in our country, was that patents are property rights.
They are property rights that are tantamount to property rights in any other type of valued asset, whether a farm or crops or cattle. These are actual references and comparisons that are made in some of the judicial opinions that I found. So they should be secured as property rights, which is why patents and these intellectual property rights more generally functioned as property rights in our innovation economy.
Giachino (07:35.0470 - 07:42.0339)
When we discuss patents, we hear the term American exceptionalism. Can you help us better understand what is meant by that?
Mossoff (07:42.0709 - 10:13.0390)
Yes. American exceptionalism is the term that historians use for the revolution that was represented by the American Revolution. The Founders were radically innovative in so many ways. The most obvious one is recognizing that we had to have a written constitution. This idea of constitutionalism as it's called now was created by the American Founders. They drafted a written constitution that delegates powers to a government limited only to the powers that are conferred upon it.
This was radically new and had never been done before. Not just a limited government, but a government limited to the protection of the rights of life, liberty and property. And to due process and a government that is committed to the rule of law in both substance and procedure. All of these were exceptional features of the American Constitution and of the American political system as it began in 1790 with the first Congress and with the creation of the government under the Constitution. It really began in 1776 with the Declaration of Independence.
The really exciting aspect of American exceptionalism that I have discovered in my research is that the patent system was as much part of American exceptionalism (as historians generally understand this term) as everything else - as the separation of powers, as checks and balances, as a government limited to protecting the rights of life, liberty and property. Patents were very much part of this. The Founders recognized that patents were property rights. They recognized the importance of protecting them.
President Washington in his very first address to the very first Congress called on Congress to immediately enact patent and copyright laws. They debated for weeks what to call President Washington - whether they should call him his excellency or something else. But one of the very first laws the first Congress immediately enacted are the first patent law and the first copyright statutes. In these statutes, they define these rights as property rights in accord with the exclusive right that Congress was authorized to protect in the Constitution.
Mossoff (10:13.0760 - 11:19.0590)
What that meant was that they could then take that right into the marketplace. It wasn't a monopoly grant. It was a property right like any other property they could take into the marketplace. They could transact with it, split it up and carve it up into different types of rights. They could use it as collateral for loans and do all the things that every other property owner could do with their property rights. This had never been done before with patents and it explains why the United States had an explosive growth in its innovation economy. The industrial revolution then shifts to the United States as know from England to the United States in the 19th century.
The United States ends up having this unprecedented, explosive growth in its innovation economy for the next 200 years. And patents were really fundamental and key to this. It wasn't the only thing. You have to have the rule of law. You have to have stable legal and political institutions. You have to have a commitment substantively to the protection of similar rights of life and liberty. But patents were an essential part of that whole package of what we now refer to and identify as American exceptionalism.
Giachino (11:20.0169 - 11:32.0400)
Let's go back to the term that you just referenced - monopoly. There are certainly some critics of intellectual property protection who view patents as a monopoly. How do you respond to this?
Mossoff (11:32.0799 - 14:46.0849)
There are a couple different responses because it doesn't really come from one foundational era. One has to be careful not to be reductionist when thinking about these issues. So one reason why they may think that patents are monopolies is because historically, they were monopolies. So before the United States in England and in countries before that there were grants to inventors and to creators, but from the government and crown, and those were monopoly grants. They were viewed as monopoly grants and protected as monopoly grants. They served economic policies and other types of policies that the government may have had.
It is true that patents were born of monopoly grants. In fact, the term patent is derived from the English legal device for the crown in issuing special privileges to subjects. The device was a letter patent. This was “law French” as we call it in the law where the adjective is similar to the grammar in French. It follows the noun. So it was an open letter. Of course, good Americans speaking only English said, “the adjective must be letter, not patent.” So we're going to call these patents and this is how we ended up with the adjective patent becoming the noun patent. It's rooted in this historical practice, but people don't recognize that it's very much the American break with England.
Patents were just as much part of that revolutionary break as everything else. Other people are confused because they take an economic perspective or they take a very narrow perspective of what they consider makes property, property. They think property is only for tangible goods. It's a device for resolving disputes over scarce resources and things of this sort. They think ideas aren't scarce. You can copy inventions without diminishing someone else's use of their invention. But what they don't recognize is that the foundational justification for what makes patents property rights is this lacking recognition of value creation through productive labor.
If that is your understanding of it then you see the same thing that the early judges, James Madison and others recognize, which is that this is about securing the fruits of productive labor of people creating new things. Just as a farmer spends a year tilling the soil and creating a farm, an inventor spends some time creating a new invention is engaging in the same type of productive labor. He should be secured in those rights for the same reasons.
Giachino (14:47.0770 - 14:56.0369)
Along those lines, can you give us an example of an innovation or two that comes to your mind that might not exist if it weren't for those IP protections?
Mossoff (14:57.0239 - 16:49.0750)
That's a great question. Before I give you your answer about specific inventions, I want to address a premise in your question. A lot of people think patents exist for purposes of spurring the creation of an invention in the first place. And while that is certainly a function of patents, it's a function of all property rights. If you tell a farmer, if you take fallow land, till the soil, plant the crops, kill bugs and then harvest the crops, you'll get the crops. Well, that will incentivize farmers to want to do those activities.
So all property rights serve this function, but that's not the only function of a property right. Then the property right isn't just about the right of acquisition. It's about the right of disposal and use. The right of the the ability to trade with it. To engage in additional commercial innovation and other types of innovative and creative activities to figure out how to distribute and mass produce your products through the marketplace and complex commercial and contractual arrangements that are all predicated upon people exercising their exclusive rights to dispose of their property rights or their values.
So it's very important when we think about intellectual property to recognize that more important than the incentivizing function is the commercialization function. The patents serve as the bridge from the lab to the marketplace, from the garage to the marketplace. They are what serve as the mechanisms by which people can come together and negotiate through arm's length transactions and commercial deals.
Mossoff (16:49.0890 - 19:30.0329)
People invent for all sorts of reasons and invention is a common activity. Humans are naturally inquisitive given that we're rational animals as Aristotle defined us. So people have lots of reasons to come up with inventions and new types of ideas and products all the time. But an invention in the lab or a creation in a garage or someone's office is not the same thing as the innovation of a product - a new technological product - or service that is used by consumers and other people around the world.
In a lot of ways we have to make sure that when we talk about what inventions would exist or not exist but for the patent system, we have to recognize that we're not talking about the act of invention. We're talking about the creation of innovation and inventions translated into real world products and services. Not just something that's conceived by an individual inventor.
One can identify a tremendous number of products and services. In fact, the patent system is really a victim of its own success in many ways because people don't realize how many of our products and services were all patented, which makes sense because these property rights were the mechanism or the bridge by which they were translated into commercial products in the marketplace.
Everything from our toothpaste tubes to Raggedy Ann dolls and Monopoly board games to the really big inventions that we learn about from the great inventors. Thomas Edison and his light bulb, his motion picture camera and his electrical distribution system. The Wright Brothers with the airplane. Tesla with wireless transmission of electricity and alternating current electrical distribution. Samuel Morris's electromagnetic telegraph and Charles Goodyear's conceiving of his method of making what was called vulcanized rubber - rubber as a usable product. These were all innovations that were invented in labs, offices and workshops. It was the patent that then translated that invention into an actual real-world product and service. So pretty much everything we have in our world today is predicated upon property rights in this respect and patents serve that same function.
Giachino (19:30.0770 - 20:20.0614)
Adam, thank you for sharing with us so much information about the Constitutional protection of intellectual property and the role that it plays in an innovation economy. I want to fast forward a couple of centuries now to today. We have a new Congress that is going to come in just after the new year.
What can that new Congress do in your mind to significantly strengthen or restore IP rights going forward? Do they need to beat back “March In” or pass the RESTORE, PERA or PREVAIL Acts? All of the above or more? These are things that I've talked about with other guests on the program. I'm not asking you to dive into each one individually. But what are your thoughts if you could do a wish list for the incoming Congress. What would you put at the top of that list?
Mossoff (20:20.0984 - 20:25.0469)
My wish list would be everything that you identified. [Laughter]
Giachino (20:26.0199 - 20:29.0010)
We're not greedy, right?
Mossoff (20:29.0020 - 24:10.0469)
No, not at all. It’s like my children when they give me their Christmas list. It's got 50 things on it. [Laughter]
The United States in the past 10 or 15 years has really lost its way. It has forsaken this historical and Constitutional tradition in the protection of innovation massively through legislation, agency actions by antitrust officials, and strategic litigation and court decisions that have really weakened our patent system. It's eviscerated patent rights outright, has weakened and undermined other patent rights and it has destabilized patents as a property right in driving economic activity and innovation.
Everything you mentioned are really important reforms that should be implemented. At the top of the list, I would probably place the bill that you mentioned in your opening question about restoring the patent system, which is the RESTORE Patent Rights Act. It is a great bill because it's a single sentence. Congress can write clear, simple legislation. It is possible. It's a single sentence, which restores the presumptive right to an injunction for when someone is found to be infringing a valid patent.
This was the doctrine that existed in this country from 1790 until 2006 when the Supreme Court upended it with a decision that is referred to as the eBay decision where they created a four-factor test that has led to the evisceration of the ability of patent owners to obtain injunctions when there is ongoing and continuing infringement of a valid patent right. A recent study by economist Dr. Kristina Acri found that courts now deny injunctions on a finding of infringement of a valid patent. This isn't a so-called junk patent. This is a valid patent that is to survive the challenges at trial. A jury or judge has found it to be infringed. If you are a company that licenses your patents, you are denied patent injunctions in 91% of the cases now.
Even manufacturers are denied injunctions in 63% of the cases, she found. It is a significant drop in the reduction of the issuance of injunctions. Now, you might be wondering why this matters. Well, because injunctions are the backstop of what makes possible commercial transactions in the marketplace. Everything that I have been talking about in our discussion up until now is the injunction. It's your ability to say no to someone, which compels them to negotiate with you in the first place.
Otherwise, if you can't say no, someone's just going to take your property. This person will just invade your home. If someone wants to rent your bedroom, they have to negotiate with you because if they invade your home and become a squatter in your spare bedroom, you can get them kicked out. You can sue them for trespass and get an injunction and have them removed. So this is what forces them in the first place to sit down and say what is it worth to you? What should I pay to you to use your property? Patent owners no longer have that ability to kick out the person invading their spare bedroom. So large companies do invade their spare bedrooms and they say, go ahead and sue me. It'll take you five or ten years, you're not going to get an injunction and eventually a judge will just tell me what I should pay as reasonable rent or as we would say in patent law, a reasonable royalty.
Mossoff (24:10.0819 - 25:15.0250)
This is really undermined as you can understand from the home example. Your home would be worth a lot less to you. If you tried to sell it, it would come with this compulsory squatter. So you can understand why someone would pay less for your home now than you would normally get. You've lost your exclusive right. You've lost this ability to decide this control over your property and how you distribute it, sell it and engage with other people in the marketplace. This is what has happened for patent owners today.
So you can see how this has struck at the very core of what it means to have patents as property rights because it has undermined and destabilized this commercialization function of patent rights. It portends darkly because companies have been investing and have had to continue to invest to create. But their investments are going to slow down and eventually, they're not going to be relying on the patents to deploy new products and services in the marketplace in the way that they have been for the past couple hundreds of years.
Giachino (25:16.0030 - 25:31.0410)
I think you've just answered my final question, which is what are the biggest threats to IP protection today? And I'll leave the mic open in case there's anything else that you want to either take off of that question or take in a different direction.
Mossoff (25:31.0000 - 27:25.0339)
As we mentioned, we would destabilize the foundations - a key driver, pillar or a launch pad for our innovation economy - in the same way that Elon Musk is now launching Starship and Falcon rockets on a daily basis now. Space travel is going to become, probably be in our lifetime something that we can do. It's on my bucket list to go up into space someday. We've destabilized this foundation and so we need to restore it.
But it also has lots of other implications that are really important. It has implications for our national security. We face global competitors today. The United States has faced global competitors in the past. For instance, the Cold War with the Soviet Union. For those of us who are old enough to remember the Cold War, we remember we didn't win the Cold War by having more tanks and more missiles and soldiers than the Soviet Union. They always outnumbered us in those in terms of just quantity. We beat the Soviet Union because we doubled down on what made America exceptional - our free market and our commitment to property rights.
We made sure that our patent system was there for innovators. So we out innovated the Soviet Union. We made better rockets. We made better airplanes. We made better tanks and those technologies that were being deployed through patents in our military products are technologies that are used today by consumers as well and benefit all of us, such as GPS.
Mossoff (27:25.0479 - 29:03.0500)
Today, we face a tremendous threat from a new global competitor - China. China learned a lesson from the Soviet Union in that you have to have an innovation economy if you're going to succeed in your geopolitical strategy of dominating the world. So they have created a very strong patent system for themselves internally that they use for their own citizens to promote, deploy and develop their own innovations. They're catching up to us if not leading us in several other key areas of technology now at this point.
While we are weakening and undermining the foundations of our innovation economy and of our national security, China has recognized that it is doing the exact opposite. It is shoring up and it is deploying all of the legal frameworks necessary to become and continue to be a competitor and to dominate the world and displace the United States as a global tech leader. If it does that it's going to build into its technology its values as a collectivist society that do not respect the rights of life, liberty and property.
If we want to continue to have these types of freedoms and to be a global tech leader in the norms of what makes America exceptional in free market, limited government, protection of the rights of life, liberty and property, we need to recognize that the patent system is a key part of that and it will play a key part in our continued efforts to counter this global competitor China.
Giachino (29:04.0219 - 29:26.0780)
Adam, thank you for helping us understand why we should care about IP protections. In other words, why IP protections matter, which is the name of our podcast. Our guest has been Adam Mossoff. He's a professor at the Antonin Scalia School of Law at George Mason University. Thank you so much again for following us. If folks want to follow you, how can they do that?
Mossoff (29:27.0209 - 30:06.0160)
They can follow me on LinkedIn and I'm on X, formerly Twitter, where I post “on this date innovation history” where I identify the anniversaries of when patents were issued on all sorts of products and services. The types of things that I mentioned. In part because I want to make people realize how ubiquitous the patent system has been in our daily products and services. From our toothpaste tubes to our toothpaste to our actual toothbrushes, all the way up to our smartphones and our new mRNA-based vaccines and drugs.
Giachino (30:06.0800 - 30:30.0020)
We certainly live in amazing times. Great technology, a digital economy, advanced medicine and pharmaceuticals. We enjoy all of these benefits because of the IP protection rights that have been in place and that need to be restored as we've talked about. Our guest has been Adam Mossoff. Adam, thank you so much for all of your time today. We will continue to follow you and hopefully have you join us again on the program.
Mossoff (30:30.0300 - 30:32.0760)
Thank you, Renee. It was really wonderful to chat with you today.