more than a half century ago: access to the courts cannot be denied or penalized, even though only debatable questions are presented. The principle was reiterated recently in a decision in which the court stated that a patentee who had reasonable grounds for believing that his patent was valid and was being infringed was authorized to bring an action for infringement, notwithstanding the perpetuation of the effects of other antitrust violations.82

The Court of Appeals for the Ninth Circuit discussed this principle most incisively in Handgards, Inc. v. Ethicon, Inc. 83 The Ninth Circuit recognized the interrelationship of the patent doctrine, the Noen principle, and the presumption of patent validity. The court of appeals noted that the doctrine permitting patent owners to seek enforcement of their patents in good faith required the courts to shield the honest patentee who brought an infringement action to protect his legal monopoly from counterclaims for antitrust violations by reason of such enforcement.84 In sustaining patentees' right to test the validity of their patents in court, the court observed that patentees' "status as alleged possessors of a legal monopoly does not cause them to be pariahs before the law." Accordingly, the court held that a suit for patent infringement was presumed to be in good faith and that only clear and convincing evidence could rebut the presumption.86 The court reasoned that the presumption of good faith was consistent with the statutory presumption of pat ent validity. The imposition of an extra burden on patentees seeking preliminary relief, therefore, indirectly undermined the patentee's right to seek redress in the courts.

3.

87

Compulsory licensing

"85

The near impossibility of preliminary relief and the duration of litigation on the merits in patent cases ensures alleged infringers several years

670-71 (6th Cir. 1930) (patentee's claims of infringement not considered legal wrong unless made in bad faith or with malice).

81 See Straus v. Victor Talking Mach. Co., 297 F 791, 798-99 (2d Cir. 1924). 82.

Ansul Co. v. Uniroyal, Inc., 448 F 2d 872, 882-83 (2d Cir. 1971), cert. denied, 404 U.S. 1018 (1972) Accord Solvex Corp. v. Freeman, 459 F. Supp. 440, 451 (W.D. Va. 1977) (patent infringement suit is usual means of enforcing patent, without which patent rights may be useless); Cameron Iron Works, Inc. v. Edward Valves, Inc., 175 F. Supp. 423, 426 (S.D. Tex. 1959) (bringing and maintaining suit for patent infringement alone cannot violate Sherman Act), aff'd, 286 F.2d 933 (5th Cir.), cert. denied, 368 US 833 (1961).

83 601 F.2d 986 (9th Cir. 1979), cert. denied, 444 U.S. 1025 (1980).

84. Id at 996. The court reversed a jury award of damages to the alleged infringer, who had brought a treble damage action against the patentee claiming bad faith litigation as part of a plan to monopolize. Id. at 987.

85 Id at 993.

86. Id at 996. This rule was adopted in order to safeguard infringement actions from the sanction of treble damages, unless the action had been identified with certainty as being brought in bad faith. Id. at 993.

87 Id.

of freedom to infringe, notwithstanding injury to the patentee. The effect is equivalent to compulsory licensing for which there is no legal basis. The Patent Code does not include any provision for compulsory licensing, and proposals for such a provision have been rejected by Congress.88 Moreover, the Supreme Court has adhered to the congressional view by repeatedly rejecting arguments for compulsory licensing of unpatented articles that satisfy the criteria of contributory infringement, and by declining to manufacture forfeiture or compulsory licensing out of the language of the Patent Code.89 Such emphatic rejection of the principle of compulsory licensing by Congress and the Supreme Court leaves the compulsory licensing equivalent that results from placing preliminary relief outside the reach of patentees without legal foundation.

90

B. Conflict with the Synthesis of the Applicable Competing Policies Although the ultimate goals of patent policy are similar to those of antitrust policy, the patent right is exempted from the antitrust laws. Cases considering the interface of the two legislative schemes indicate respect for the patent right and an effective presumption of validity. The patent system is intended to encourage invention, commercialization of inventions,91 and disclosure of inventions.92 The broader benefits that result from patent policy's fostering of industrial invention and innovation include economic vitality, improved quality of life, and the ability to solve pressing problems concerning such matters as health care, food and energy supplies, and natural resources.93 Similarly, antitrust law attempts to ensure "the best allocation of our economic re

88 For example, in 1957 the Senate Subcommittee on Patents, Trademarks, and Copyrights considered a suggestion to make licensing compulsory. After assessing the importance of the public interest and the benefits of the patent system in encouraging innovation, the subcommittee concluded that compulsory licensing would be detrimental to the public interest and ineffectual in achieving the objectives sought. SUBCOMM. ON Patents, Trademarks, and COPYRIGHTS, PROPOSALS FOR IMproving the PATENT SYSTEM, S. Doc. No. 21, 85th Cong., 1st Sess. 29 (1957).

89. See Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176, 215 (1980) (construing 35 U.S.C. § 271(d) (1976)). See also Special Equip. Co. v. Coe, 324 U.S. 370, 379 (1945) (observing lack of congressional authority for compulsory licensing); Hartford Empire Co. v. United States, 323 U.S. 386, 432 (1945) ("Congress has repeatedly been asked, and has refused, to change the statutory policy by imposing a forfeiture or by a provision for compulsory licensing ̈).

90. Ser Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 229 (1964) (patents meant to encourage invention by reward of right to exclusive use). Mitchell v. Tilgham, 86 U.S. (19 Wall.) 287. +18 (1873) (principle purpose of patents to encourage useful inventions); Grant v. Raymond, 31 U.S. (6 Pet.) 94, 97 (1832) (patent is reward intended as stimulus to individual exertions).

91 See SCM Corp. v. Xerox Corp., 645 F.2d 1195, 1206 n.9 (2d Cir. 1981) (investors indispensable to inventions and commercialization of inventions), cert. denied, 455 U.S. 1016 (1982).

92. See Universal Oil Prods. v. Globe Oil & Ref. Co., 322 U.S. 471, 484 (1944) (patent is reward for inventions and their disclosure by inventor who refrains from keeping invention a trade secret).

93. See President's Message to Congress Transmitting Industrial Innovation Initiatives, 15 WEEKLY COMP. PRES. Doc. 2069 (Oct. 31, 1979) (inventive process is key to increased production, international competition, reduced unemployment, and improved quality of life).

sources, the lowest prices, the highest quality and the greatest material progress" by fostering competition. Patent law promotes the progress of science and the practical arts by providing an exclusive right for a limited time to offset the risks-involving much effort, time, and cost-of research, development, and commercialization undertaken by the inventor and those providing funding.95 Issuance of the patent results in the publication of knowledge which might otherwise have been withheld as trade secrets. Furthermore, after the patentee has reaped the benefits of the invention for the statutory period of years, the patent expires and the public receives the right to use the invention commercially.96

94. Northern Pac. Ry. v. United States, 356 U.S. 1, 4 (1958).

95 Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 480 (1947). In Kewanee the Court noted that the introduction of new products and processes fostered by the patent system would have positive effects on society, such as increased employment and better lives. Id. See also SCM Corp. v. Xerox Corp., 645 F.2d 1195, 1206 n.9 (2d Cir. 1981) (investment in commercialization and investment in basic research of comparable value), cert. denied, 455 U.S. 1016 (1982).

Without the statutory monopoly provided by the patent system, certain unique innovations not readily adaptable to industrial technology might never be developed. "[G]reater technological and market uncertainties, higher development costs, and longer inception-to-commercialization lags" could inhibit entrepreneurial investment where there is no assurance that a successful invention could be exploited to the fullest through exclusive patent rights. F.M. SCHErer, Industrial MARKET STRUCTURE AND ECONomic PerformANCE 448 (2d ed. 1980). For example, patent protection evidently hastened the development of xerography. Id. The inventor of an electrophotographic process later named xerography had great difficulty convincing business machine companies to fund his research. See SCM Corp. v. Xerox Corp., 463 F. Supp. 983, 992 (D. Conn. 1978), aff'd, 645 F.2d 1195 (2d Cir. 1981), cert. denied, 102 S. Ct. 1708 (1982). It was not until 1946-eight years after the original invention—that Xerox agreed to sponsor the research in exchange for a license. Id. It was another fourteen years before the introduction of a xerox copier suitable for office use. Id

It appears that among the great benefits of the patent system is stimulation of investment. See Picard v. United Aircraft Corp., 128 F.2d 632, 643 (2d Cir.) (Frank, J., concurring), cert. denied, 317 US. 651 (1942) Judge Frank stressed the procompetitive effects of the patent system's stimulus to investors, particularly when small new companies are provided with the means to compete against large corporations. This threat of competition has prodded larger corporations to expend more resources on research and development. Id "The David Co. v. Goliath, Inc. kind of competition is dependent on investment in David Co-the small new competitor. And few men will invest in such a competitor unless they think it has a potential patent monopoly as a slingshot." Id. Xerox is an example of such a "David." By virtue of its willingness to invest in and develop an untried invention, Haloid Company of Rochester, New York, as Xerox was known in 1946, created new competition for existing suppliers of copying and duplicating equipment. Many of these companies, such as Eastman Kodak, 3M and Addressograph-Multigraph, had resources that far exceeded those of Haloid. Id. See also United States v. Parker-Rust-Proof Co., 61 F. Supp. 805, 808 (E.D. Mich. 1945) (meritorious patent may lie unused for years until enterprising person takes promotional risk): Application of Anthony, 414 F.2d 1383, 1398 (C.C.P.A. 1969) (fundamental purpose of patent system is to stimulate investment of capital needed for further development and marketing of inventions), Application of Herr, 377 F.2d 610, 619 (C.C.P.A. 1967) (Rich, J., concurring) (grant of patent rights encourages investment of risk capital).

96 An inventor has no legal obligation to disclose his invention. See, eg, Lear, Inc. v. Adkins, 395 U.S. 653, 677 (1969) (Black, J., concurring in part and dissenting in part) (discoveror may keep discovery secret if he wishes); United States v. American Bell Tel. Co., 167 U.S. 224, 250 (1897) (inventor not bound to disclose invention-his "absolute property"-to public); Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 281 (2d Cir. 1979), cert. denied, 444 U.S. 1093 (1980) (company may keep its innovations from rivals, forcing them to catch up through their own efforts). In order to secure to the public the benefits of full knowledge of innovative ideas and the right to

The patent right, however, seems to conflict with antitrust doctrines. The Sherman Act97 prohibits monopolization and attempts to monopolize.98 Monopoly is customarily defined to include the power to exclude.99 A patent, on the other hand, grants the power to exclude 100 Assuming a relevant market co-extensive with the patent, therefore, the issuance of a patent constitutes a grant of a seventeen-year monopoly, 101 Consequently, one body of law outlaws an illegally obtained monopoly while another body of law grants a form of legal monopoly. As the Supreme Court stated in Dawson Chemical Co. v. Rohm & Haas, 102 “the policy of stimulating invention that underlies the entire patent system runs no less deep" than the antitrust policy of free competition. 103 Pat

implement them in the future, Congress created the patent system to allow the inventor a limited opportunity to gather material rewards for his invention. See Special Equip. Co. v. Coe, 324 U.S. 370, 378 (1945). See also Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 484 (1974) (disclosure quid pro quo of right to exclude); F.M. SCHERER, supra note 95, at 440 (governments grant exclusive patent rights on inventions to promote invention and encourage their commercial utilization and disclosure to public).

97. Ch. 647, §§ 1-8, 26 Stat. 210 (1890) (current version at 15 U.S.C. §§ 1-7 (1976)).

98. 15 U.S.C. §2 (1976). Section 2 provides: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony.

99. United States v. Grinnell Corp., 384 U.S. 563, 576 (1966).

100. Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176 (1980). In Rohm & Haas the Court acknowledged "the long-settled view that the essence of a patent grant is the right to exclude others from profiting by the patented invention." Id. at 215.

101 35 USC § 154 (1976). Section 154 provides in pertinent part: “Every patent shall contain a grant to the patentee, his heirs or assigns, for the term of seventeen years, . of the right to exclude others from making, using, or selling the invention throughout the United States

The patent code authorizes actions for patent infringement, 35 U.S.C. § 281 (1976), actions to enjoin infringement, 35 U.S.C. § 283 (1976), and actions for damages due to infringement, 35 U.S.C. § 284 (1976). Infringement is defined in § 271. 35 U.S.C. § 271 (1976).

The authority to grant patents derives from the Constitution, which gives Congress the right to "make all Laws which shall be necessary and proper for carrying into Execution" its enumerated powers. U.S. CONST., art. 1, § 8, cl. 18. Among those enumerated powers is the power "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Id. cl. 8.

102 448 U.S. 176 (1980).

103. Id at 221. In Rohm & Haas the Court held that under the language of 35 U.S.C. § 271(d) (1976), a patentee did not misuse his patent by refusing to license the patent except on the condition that the licensees purchase from him an unpatented nonstaple article having no significant use except in the patented process. Id. at 223.

The dissent would have construed § 271(d) to permit suit against unlicensed contributory infringers-persons selling the unpatented product that constituted a material part of the patented process but would have required the patentee to offer to license those persons. Id at 230-40 (White. J., dissenting). In that way, the patentee could sue for contributory infringement, but could not reserve to himself the entire market for the unpatented nonstaple article. See id.

The Court rejected the dissent's construction of § 271(d) on the ground that it permitted sellers of an unpatented item to await the outcome of the patentee's efforts and then to capitalize on the patentee's success by demanding licenses to sell the unpatented item in the newly developed process. Id at 222. The Court noted that "[t]he incentive to await the discoveries of others might well prove sweeter than the incentive to take the initiative oneself." Id. Such a result, the Court reasoned, would conflict with the essence of the patent right to exclude and the absence of a statutory provision for compulsory licensing. Id. at 215. The Court did not decide, however, whether such a regime was either "workable" or consistent with "the principles of free competition." Id. at 223.

ent law therefore confers an "exemption from the antitrust laws."104 Thus, although exploitation within the patent monopoly is protected, extension of the patent monopoly beyond its legitimate scope will result in a forfeiture of the right to enforce the patent. Consistent with the patent misuse doctrine,10% overreaching the scope of a patent will subject the patentee to the rigors of the antitrust law, 107

105

108

In a close choice between the patentee's right to exclude and the alleged infringers' interest in competition, several recent decisions have concluded that the patentee should prevail. For example, in Rohm & Haas the Supreme Court held that a patentee who refused to license others to sell an unpatented product that satisfies the criteria of contributory infringement had not misused his patent. In effect, the Court permitted the patentee to compel those wishing to practice its patented method to purchase from it the unpatented material necessary to practice that method, although this practice usually is treated as an illegal tie-in under the antitrust laws. 109 The Court, recognizing the risks involved in and the need to encourage research,11o rejected a construction

104. Walker Process Equip., Inc. v Food Mach. & Chem. Corp., 382 U.S. 172, 177 (1965). 105. See Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488, 494 (1942) (misuse of patent disqualifies patentee from suing for infringement because of adverse effect of misuse on public interest). Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 459 (1940) (extension of patent monopoly to exploit unpatented article not permitted); Sylvania Indus. Corp. v. Visking Corp., 132 F.2d 947, 953-58 (4th Cir.) (injunction against patent infringement denied until patentee stopped monopolizing sale of unpatented product), cert. dismissed, 319 U.S. 777 (1943).

106 Under the misuse doctrine, a patent owner forfeits the right to exclude as long as the misuse and its effects continue. Once effective curative measures have been taken and any anticompetitive effects dissipated, infringement can be enjoined. See Performed Line Prods. v. Fanner Mfg. Co., 328 F 2d 265, 276-79 (6th Cir.) (misuse of patent by tie-in of unpatented goods to patented items to expand monopoly purged by widely enforced "unrestricted sales" policy), cert. denied, 379 US. 846 (1964).

The doctrine of patent misuse denies relief against infringement where the patentee has sought to extend unlawfully the scope of his patent; the doctrine of contributory infringement. however, provides protection for the patent right against attempts to infringe the patent indirectly by facilitating acts of third persons. See, eg. Dawson Chem Co. v. Rohm & Haas Co.. 448 U.S. 176 (1980) (judgment in favor of patentee inventor of herbicide application process against those seeking licenses from patentee for sale of unpatented herbicide), Aro Mfg. Co. v. Convertible Top Replacement Co., 377 US. 476 (1964) (direct infringement where convertible top combinations sold without valid license from patentee: contributory infringement where replacement fabrics specially cut for use in infringing repair supplied). But see Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972) (patent not infringed when unpatented elements assembled into combination outside United States): Mercoid Corp. v. Mid-Continent Inv. Co., 320 U.S. 661 (1944) (patentee's attempt to control market for unpatented goods constituted patent misuse even where goods had no use outside patented invention).

107. See Mercoid Corp. v. Mid-Continent Inv. Co., 320 U.S. 661, 666 (1944) (patentee who moves beyond scope of patent monopoly enters area where antitrust or other laws define public policy). United States v. CIBA GEIGY Corp., 508 F. Supp. 1118, 1150 (D.N.J. 1976) (patentee who expands monopoly beyond that reasonably implicit in patent collides with antitrust laws). 108. Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 221 (1980). See supra note 103 109 Dawson Chem. Co. v. Rohm & Haas Co.. 448 U.S. 176, 223 (1980) See also Fortner Enter v. United States Steel Corp., 394 US. 495 (1969) (advantageous credit terms used to extend seller's economic power and foreclose competition in tied product illegal).

110.

See supra notes 90-96 and accompanying text.