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52 N.Y.U. L. Rev. 977 (1977)
Issue 5

handle is hein.journals/nylr52 and id is 1001 raw text is: NEW YORK UNIVERSITY LAW REVIEW VOLUME 52 NOVEMBER 1977 NUMBER 5 PROPERTY RIGHTS THEORY AND PATENT-ANTITRUST: THE ROLE OF COMPULSORY LICENSING MARTIN J. ADELMAN* To promote creative activity, the patent system, like its copy right and trade secret counterparts, sanctions otherwise impermissible monopoly powers orer patented products and processes, powers that are often viewed with alarm by advocates of a freely competitive market structure. Those who question the propriety of limiting these monopoly powers through the antitrust laws hare found support for their defense of unrestrained patent exploitation in theories of property rights that en- dorse incentives to internalize the costs and the benefits inhering in ownership. In this Article, Professor Adelman submits that acceptance of a property rights new of patents requires the regulation of certain pricing, licensing, and suppression techniques used by patentees to undermine the effectiveness of the patent ralidity system. He proposes that courts exercise their equity powers in infringenent suits to devise a compulsory licensing rule with a twist, one designed to accommodate both the patent holder's legitimate interest in obtaining his rightful share of the monopoly profits and society's interest in limiting any appropriation to the social value of the invention. INTRODUCTION For well over a century after Congress passed the first patent statute,' American law vigorously fostered and protected property rights in inventions.2 The appropriate scope of those rights, how- * Professor of Law, Wayne State University Law School. A.B., 1958, M.S.. 1959, J.D., 1962, University of Michigan. . I Act of Apr. 10, 1790, ch. 7, 1 Stat. 109 (current version at 35 U.S.C. §§ 1-376 (1970 Supp. V 1975)). 2 See, e.g., Henry v. A.B. Dick Co., 224 U.S. 1, 26-36 (1912); Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 423-26 (1908); Bement v. National Harrow Co., 186 U.S. 70, 91 (1902); Hogg v. Emerson, 47 U.S. (6 How.) 437, 486 (1848); Grant v. Raymond, 31 U.S. (6 Pet.) 178, 197 (1832); Heaton-Peninsular Button-Fastener Co. v. Eureka Specialty Co., 77 F. 288, 289-96 (6th Cir. 1896). The solicitude of western legal systems for property rights in inventions has had important consequences. For example, Professors North and Thomas suggest that the development of patent law in England fueled the industrial revolution. See D. NoRTH & R. TlioMtAs, THE RiSE OF THE WESTERN WoRLD 2-3, 152-56 (1973). 977 Imaged with the Permission of N.Y.U. Law Review

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