Introductory Remarks

Munich, Germany


The invention of the patent system was a great achievement—this is a statement on which nowadays almost all lawyers and economists would probably agree, at least with reference to the situation in the developed countries. Exactly how an optimal system should look, however, is the subject of continuous debate. For some time, there has been a discussion underway about the phenomena of the current patent law system. New terms such as patent troll, submarine patent, patent thicket or patent ambush are often used to describe the situation. All these terms obviously have a negative touch and make clear that the current system might not be optimal. Some of these problems may occur just because of the negligent and imprecise application of current patent law, which may result from the organisation of the patent offices or overly complex procedural rules. Solutions in this respect are discussed in detail under the term patent quality.1 But, improvement could also be achieved by amending patent and competition law. Some authors have focused on the initial entitlement, i.e., on pre-grant remedies. They have investigated, for example, what should be patentable and for how long. Another important field concerns issues regarding the time after the patent grant. There, the focus lies on whether patent law provides effective measures, procedures and remedies to ensure the enforcement of IP rights, especially against piracy, as has been of concern with the European Enforcement Directive.2 Another basic post-grant issue, which to some extent also addresses the field of open innovation if the term is understood in a broad sense,3 is whether patents should constitute exclusive or non-exclusive rights. This question means here, with reference to the study by Calabresi and Melamed,4 whether an initial entitlement should be enforced by property or liability rules. Under the former, the patent owner may exclude others from using his invention, but not under the latter, although the owner is always entitled to receive a certain amount of remuneration.5 In patent law, exclusive rights may become non-exclusive under certain conditions, for example, in the case of the grant of a compulsory licence. Of course, all the points mentioned to improve the patent system must be taken into consideration as they are often intertwined. Nevertheless, the focus of this work lies on the particular issue of whether and under what conditions patents should be protected by property or liability rules.

At first glance, the solution seems evident and several commentators presume that a patent confers an exclusive property right by which the owner may prevent its use by others. One reason for this exclusivity might be that in many legislations—for example, the Anglo-Saxon and the French6—patent law indisputably belongs to the field of intellectual property, a term that has increasingly become established throughout the world.7 It already suggests that there must be commonalities with the property rights in tangible goods. However, even a statement that property is a strict exclusive right is probably wrong for most legislations, especially Germany, which already becomes apparent from the relevant provision in constitutional law. According to Article 14 German Basic Law (Grundgesetz),8 which contains the principle of guarantee of ownership (para. 1), and which is also applicable to all proprietary rights,9 including inventions and patents,10 property entails obligations and its use shall also serve the public good (para. 2). Paragraph 3 indicates that expropriations are allowed under certain conditions. Therefore, in principle, not even property is strictly an exclusive right; under certain conditions and in compliance with procedural requirements, the initial entitlement may be impaired or negated. Sometimes a balance of interests with respect to the circumstances of an individual case is required to determine whether a property right should be an exclusive right or not. This is also true for the field of patent law in which different interests such as those of the (potential) inventor, the competitor and the general public must be considered. Other interests than those for the decision whether property should be an exclusive right may be relevant here. This work focuses foremost on the economic function of the patent system and seeks to find the right balance between the diverse interests and, therefore, also between exclusivity and non-exclusivity. That the balance might not be optimal at the moment was already indicated above.

Striking the right balance between exclusivity and non-exclusivity is not only of interest for such current patent law systems as that of Germany, but especially also for the future European Patent with Unitary Effect according to the Regulation (EU) No. 1257/2012 of the European Parliament and the Council of 17 December 2012 and the Agreement on a Unified Patent Court.11 This new system will enter into force on the date of entry into force of the Agreement on a Unified Patent Court which date is further defined in such agreement.12 Therefore, it is also interesting to examine whether this new system will strike a good balance between exclusivity and non-exclusivity. This work will focus foremost on the German law but will also take the future European Patent with Unitary Effect into account. Most conclusions from the analysis could, however, also be transferred to other legislations.13

In the following section, the methodology (Sect. A.), the research questions and the scientific interest (Sect. B.), and the content of the thesis (Sect. C.) will be explained.

A. Methodology

There are different approaches to law which, according to Calabresi, may be divided into four categories: (1) “the doctrinalism or autonomism”, (2) “the law and …”, (3) “the legal process school” and (4) “the law and status approach”.14 This work primarily takes the second approach—without neglecting the others—in which law is viewed, especially in contrast to the doctrinalism approach, as being dependent on other fields of science; however, it seems possible that these two methodologies are intertwined.15 Interdisciplinarity should admittedly be viewed with caution because each discipline also suffers from its own disadvantages; nevertheless, connecting legal analysis with other disciplines can generate interesting new results.16 The other field that should be taken into account here is economics. This study therefore especially attempts to contribute to research in the area of law and economics, in which economic efficiency as well as welfare play an important role17 and should have relevance at all levels (legislative, judiciary and executive).18 The underlying supposition in this interdisciplinary area is that jurisprudence ought to evaluate legal rules and norms according to whether they heed or hinder the efficient use of resources.19 This approach was long neglected in the field of IP law and only recently gained importance,20 although it would seem obvious in view of the fact that patent law was established as a system with exclusive rights predominantly for economic reasons.21 For instance, it provided incentives for inventors which had direct effects on the economy, especially by granting a basically exclusive right that could result in a legal, and sometimes also an economic, monopoly for a certain period of time.

Practically, this approach means using economic considerations and observations (including theoretical aspects, facts and other empirical findings) to analyse and evaluate the existing law, as well as to make proposals for alterations. In general, it is recognised that factors other than economic ones may also be relevant; where these are considered important—or even binding—this will be mentioned as well.

In this context, a study combining economic and legal research was conducted in cooperation with an economist, analysing Section 23 of the German Patent Act with respect to its relevance and practice. In order to reach the widest possible audience and to comply with the requirements laid down in the doctoral degree regulations of the different faculties,22 this analysis incorporates a two-part focus. One part, included in my research partner’s dissertation (which also contains a welfare analysis and a model of the decision to switch to a licence of right regime and to renew the patent),23 mainly addresses readers trained in economics. The other part which is included in this work contains theoretical considerations and empirical results, too; but they are presented here primarily for readers trained in jurisprudence, who usually have less of a technical background. Therefore, it is important to emphasise that the ideas, calculations and results, including all figures in the economic and empirical part (Sects. A.2 and A.3) in Chap. 3, are mainly his contribution to our joint work.

B. Research Questions and Scientific Interest

This thesis is aimed at showing that the balance between exclusivity and non-exclusivity in German law, and possibly also in the regulation on the future European Patent with Unitary Effect, is neither optimal in terms of economics nor mandated by other reasons. Additionally, this work recommends improvements to existing non-exclusive elements and even proposes some non-exclusive elements that could be incorporated into the existing patent system. To establish a concrete framework, it is advantageous to define the research questions that are to be answered in this work. The research questions are similar to hypotheses which researchers formulate in empirical studies because both the questions and the hypotheses serve to define further steps. The terms are not, however, synonymous because a hypothesis can be falsified and is tested by using statistical methods to decide whether it is correct or not.24 This is not the case for the research questions asked here because the answers are based on arguments or considerations and not purely on the evaluation of facts. Moreover, an important issue is not only what the current situation is, but also how the law ought to be. The research questions investigated in this work are the following: