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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

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