Sunday, October 21, 2007

More on "does patent confer a monopoly"?

Further to an earlier post from a commenter who believes that a patent does confer a monopoly, one might consider the Supreme Court decision in Illinois Tool.


Blogger David Woycechowsky said...

I said: A patent can effectively confer a monopoly." (emphasis in original)

I used the word "can" because they don't always.

I used the word "effectively" because they do not confer a monopoly in and of themeselves, but can the single most important factor in conferring a monopoly if the circumstances are otherwise correct (eg, no blocking patents, patentee has means to supply the market at some meaningful level, product not illegal to sell, no competitive design-arounds, patent not suspended due to public health emergency, etc., etc., etc.). For example, I think it fair to say that patents currently effectively confer a monopoly on atorvastatin (eg, Lipitor) in the US and some other countries. They do not confer this monopoly as a matter of law, but the legal protection they provide is the main thing that confers this monopoly in fact. The very day the key patent expires, the atorvastatin monopoly will go away. I would bet you $100 on that. The patent is the but-for cause of the observed monopoly. More importantly, the patent is the proximate cause of the monopoly. And this "monopoly" on atorvastatin is real and substantial.

As the Supreme Court said in the Precision Instruments case "a patent is an exception to the general rule against monopolies." I guess I could have said that a patent "can help confer a monopoly," but really, when a patented product is monopolized, then it is usually the patent that is far and away the main factor.

I have practiced with some oldtimers who have the same phobia about admitting that patents have any relevance to the existence of monopolies. That particular phobia made sense before the age of antitrust ended in 1981. Now -- who cares? Say it loud:

A patent can effectively confer a monopoly. Unless you are in the chemical arts, though, you better have an awfully good claims drafter and a lot of foresight wrt alternative embodiments.

7:23 AM  

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