Working Paper No. 06-27:
Independent Invention as a Defense to Patent Infringement
Date Posted: 2006
Independent invention is no defense to patent infringement under current law. This paper argues independent invention should be a defense provided the independent inventor creates the invention before receiving actual or constructive notice that someone else already created it. The defense reduces wasteful duplication of effort and enhances dissemination of inventions without lowering the incentive to invent below the necessary minimum. To be sure, the defense lowers the incentive for inventions that face significant odds of being invented by more than one inventor. By enabling a second inventor to compete with a first inventor (the patentee), the defense essentially breaks up the first inventor's monopoly into a duopoly. Monopoly profits exceed the collective profits of duopoly. Thus, from the perspective of inventors ex ante the defense reduces the expected profit for inventions that face significant odds of being invented by more than one inventor. Yet, as long as the reduction is moderate, the expected profit will usually remain sufficient. Per Bayes theorem, the fact that an invention faces significant odds of being invented by more than one inventor is itself evidence that a moderately reduced expected profit will still motivate at least one inventor to create the invention.