Opinion ID: 449779
Heading Depth: 2
Heading Rank: 1

Heading: The Property Rights at Issue

Text: 17 The basic right concomitant to the grant of a patent is the right of exclusivity founded in the Constitution. The patent law in force at the time that Gould's patents were issued embodied a bundle of rights in implementation of this exclusivity, including the foundational right to exclude others from practice of the patented invention. 6 18 It is beyond reasonable debate that patents are property. In Consolidated Fruit Jar Co. v. Wright, 4 Otto 92, 96, 94 U.S. 92, 96, 24 L.Ed. 68 (1876) the Supreme Court stated: 19 A patent for an invention is as much property as a patent for land. The right rests on the same foundation and is surrounded and protected by the same sanctions. 20 In Leesona Corp. v. United States, 599 F.2d 958, 966-69, 220 Ct.Cl. 234 (1979) that court affirmed that patents are property and therefore subject to the principles of eminent domain. See Johnson & Johnson, Inc. v. Wallace A. Erickson & Co., 627 F.2d 57, 59, 206 USPQ 873, 876 (7th Cir.1980), wherein the court wrote: 21 The seventeen-year exclusion is a right and not a matter of grace or favor.... It is a property right ... of which the patentee cannot be deprived without due process of law. 22 But for the position urged by Control Laser and the Patent and Trademark Office, 7 we would not belabor the point that patent property rights, necessarily including the right to license and exploit patents, fall squarely within both classical and judicial definitions of protectible property. Suffice to cite the scholarship of Jeremy Bentham, who defined property as the collection of rules which are presently accepted as governing the exploitation and enjoyment of resources. So regarded, property becomes 'a basis of expectations' founded on existing rules; that is to say, property is the institutionally established understanding that extant rules governing the relationships among men with respect to resources will continue in existence.... It is supposed that men will not labor diligently or invest freely unless they know they can depend on rules which assure them that they will indeed be permitted to enjoy a substantial share of the product as the price of their labor or their risk of savings. 8 23 Bentham's analysis is particularly apt with respect to patent property, which is granted by the government for precisely the reasons he presents. The encouragement of investment-based risk is the fundamental purpose of the patent grant, and is based directly on the right to exclude. As the Supreme Court observed in Kaiser Aetna v. United States, 444 U.S. 164, 176, 100 S.Ct. 383, 391, 62 L.Ed.2d 332 (1979), the right to exclude others is one of the most essential sticks in the bundle of rights that are commonly characterized as property. And as this court stated in Smith International, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1577-78, 219 USPQ 686, 689-90 (Fed.Cir.), cert. denied, --- U.S. ----, 104 S.Ct. 493, 78 L.Ed.2d 687 (1983), without the right to exclude the express purpose of the Constitution and Congress, to promote the progress of the useful arts, would be seriously undermined. This right is implemented by the licensing and exploitation of patents.