The Roots of Patent Policy: Rethinking Early English Patent Policy

Dr. Chris Dent, an Australian Researcher, has written an interesting new paper on the history and value of original English patents. Although invention was not the basis of the patent grant, Dent argues that they may still have been based on sound public policy goals. I asked to provide a synopsis of the paper for Patently-O readers. The full paper is available here.

The manner in which the early modern English monarchs – Elizabeth I and James I – granted patents of monopoly is not seen in a good light in current legal discourse. There are many tales of the nepotism that was, allegedly, rife and the public outrage at the abuses of the Crown – circumstances that only ended with the “triumph” of the Statute of Monopolies in 1624. This simplistic understanding does not do justice to the good intentions of Elizabeth and James; and, to an extent, may be inaccurate. There is, for example, little evidence of public displays of disaffection at the grants beyond statements made by Parliamentarians, in Parliament, who may have been beholden to interests outside those of the average subject. The thoughts and attitudes of the average early modern person, however, may not be considered worthy of inclusion in a history of English patents.

The intentions, and actions, of the elites of the time are a matter of record. An investigation of the available material – whether as part of the legal, political or economic history of the time – demonstrates that there were good public interest motives behind many of the patents granted by Elizabeth and James. An exploration of the secondary literature on English politics, coupled with a reading of the mercantilist texts (the mercantilists were the closest the society had to economic theorists) and the analysis of court judgments shows that three key policy objectives informed the monopolies awarded by the two monarchs.

These goals – increased employment levels, an improved balance of trade with other countries and the better regulation of industries – not only appear to be modern, but also may be understood to have been fundamental to the modernisation of English society and its economy. Examples of these goals in practice include the granting of monopolies for water pumping inventions to more effectively mine for minerals (increasing both goods production and employment); grants for the establishment of local industries, based on imported technical knowledge, to reduce the reliance on foreign goods; and the regulation of manufacturers to improve the quality of goods available for sale. Economic historians note that the English economy underwent significant change in the 16^th and 17^th centuries; this change may have been, in part, a result of the policy actions of the Executive of the time. Actions that included the grant to individuals and companies of the now-maligned grants of monopolies.

Comments

[metoo]

Thanks for posting this Dennis - as an academic-type trapped in the body of a lowly practicing patent attorney, I love articles like this. For any other hardcore patent geeks out there, Christine MacLeod's book on English patent law from 1600-1800 is also quite interesting and a relatively easy read. Nor surprisingly, MacLeod's book is cited in Dr. Dent's paper. Years ago I had occasion to research extensively certain historical aspects of English patent law. From what I recall, it was quite a difficult undertaking, but utterly fascinating.

[David J. French]

David French writes:

I seem to recall reading somewhere that the system of excise taxes arose out of the English Crown prerogative to grant patents in return for the payment of money. Of course, income taxes now dominate as a source of government income.

A major distinction exists between the rationale for granting early English patents and the reason of why patents are granted today. Based on the Statute of Monopolies, English patents were granted in order to establish "new manner of manufacture" within the realm. Every patent represented a potential new business. Every patent provided shelter to allow a business to get started.

In everywhere but in the United States, throughout the 19th century national patent laws had strict stipulations requiring that a local business be established as a condition for entitlement to patent rights. The history of the many revisions to the Paris Convention tracks the battle to suppress this type of nationalist self-interest.

Today, the new theory for the granting of patents accepted almost worldwide is that patents are granted in return for the disclosure of an invention. It is not necessary to manufacture an invention locally in order to assert patent rights. The TRIPS standards are now a requirement for World Trade Organization membership: http://www.wto.org/english/tratop_e/trips_e/trips_e.htm

However, there may be some backpedaling underway in the US
since eBay Inc. v. MercExchange.
http://www.supremecourtus.gov/opinions/05pdf/05-130.pdf
Let's wait and see whether only Patentee-manufacturers will be able to obtain injunctions against infringers.

[Luke Ueda-Sarson]

Readers might be interested to know that while the Statute of Monopolies is no longer part of UK law, it still is in e.g. Australia and New Zealand, and the "manner of manufacture" phrase sees regular airing in court to this day. Of course these days the word "manufacture" is given a very broad meaning.

Cheers, Luke

[Supremacy Claus]

Patents remain a lawyer scam, born out of corruption, granted to the opposite of innovators. They still harm the economy. Only 1% make any money. The ones that make money crush innovation. The term of the patent should be shortened to five years. Would one get more new drugs or fewer new drugs with terms of 20 or of 5 years?