Monday, October 17, 2022

Patent Damages and Immoral Inventions

This post addresses a theoretical question that occurred to me last week in connection with a class discussion of the "moral utility" doctrine in patent law.  As most readers probably are aware, article 27.2 of TRIPS states that member states "may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law."  Patent laws in many countries expressly provide for such an exclusion, though to my knowledge it is only rarely invoked.  In the U.S., the Patent Office and the courts on occasion have applied an analogous "moral utility" doctrine, on the authority of dictum in Justice Story's opinion in Lowell v. Lewis, 15 F. Cas. 1018, 1019 (C.C.D. Mass. 1817), that “All that the law requires is, that the invention should not be frivolous or injurious to the well-being, good policy, or sound morals of society. The word ‘useful,’ therefore, is incorporated into the act in contradistinction to mischievous or immoral. For instance, a new invention to poison people, or to promote debauchery, or to facilitate private assassination, is not a patentable invention.”  Many of the cases in which U.S. authorities at one time applied the doctrine, however--involving supposedly "immoral" or "deceptive" subject matter such as gambling games and seamless stockings--seem rather silly with the benefit of hindsight.  (According to Professors Rajec and Gilden, moreover, inventors often succeeded in getting patents on sexual devices even during the moral utility's heyday.)  In any event, the Federal Circuit may have put the doctrine to rest altogether in Juicy Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364 (Fed. Cir. 1999).  That said, on its facts Juicy Whip involved allegedly deceptive subject matter (a post-mix beverage dispenser disguised to look like a pre-mix dispenser), and one could argue that the USPTO and the courts retain some inherent authority to reject claims to inventions for inventions the practice of which would truly shock the conscience.  Then again, maybe not.  In the U.S., at least, there is no express statutory authority to inject moral considerations into questions relating to patentability--though section 181 of the Patent Act authorizes the federal government to keep secret applications claiming inventions with national security implications, and there are stand-alone federal statutes prohibiting the patenting of human organisms and nuclear weapons.  Moreover, in a pluralistic society people may hold very different views about what is or is not immoral.  Prevailing moral sentiments also can change over time, and in any event many (surely patentable) inventions--guns, drugs, whatever--can be used for both moral and immoral purposes.  On the other hand, if the USPTO were to start granting patents on, say, methods for poisoning people or facilitating private assassination, to cite two of Justice Story's examples, perhaps some would view this as a sort of government endorsement of the claimed invention; and even though such a perspective would be incorrect, one might worry about the potential "expressive" function of the law being compromised.  (Note, however, that in Matal v. United States and Brunetti v. United States, the U.S. Supreme Court held that the First Amendment prohibits the USPTO from denying trademark registrations for vulgar or disparaging terms.  The fact that some may view such registrations as a governmental stamp of approval is irrelevant.  To my knowledge, such subject matter may remain off limits in other countries, however.)

So, what does all of this have to do with patent damages?  It occurred to me that one additional reason why we may not need a moral utility doctrine is that there is usually going to be no market incentive to claim subject matter the practice of which would be illegal.  Suppose that I did obtain a patent claiming, let's say, a new method for planting car bombs.  What exactly would I do with it?  A patent, after all, is a negative right, so all it grants me is a right to exclude others from practicing the claimed method--which, if anything, would be a good thing, but unnecessary given the fact that planting car bombs is illegal anyway.  There also probably aren't many people who would go to the trouble of obtaining patents merely to contribute to law enforcement's efforts to stamp out car-bombing or other illegal practices.  Alternatively, though, suppose that our hypothetical patentee is a "practicing entity," say, a drug lord who obtains a patent on a new method for efficiently managing a drug cartel, and seeks to enforce it against a rival cartel.  The example is absurd, which again perhaps suggests why we don't need a moral utility doctrine, but let's pursue the logic anyway.  What remedy would a court grant for the infringement of such a patent?  Lost profits?  A reasonable royalty?  I'm inclined to think that any monetary remedy would be viewed as contributing to the plaintiff's illegal enterprise,  and therefore against public policy--or, to put it another way, that the plaintiff's loss wouldn't be a cognizable harm.  (I'm not 100% sure of this, though, and I wonder if there might be analogies arising in areas of law.  If a brothel burns down because of a gas leak caused by a contractor's negligence, for example, is it entitled to recover economic damages for the profits it would have earned, but for the business disruption, from the exploitation of sex workers?  Or suppose that a mob boss dies because the brakes in his SUV were defective.  Is his family entitled to wrongful death damages reflecting his future loss of income from racketeering?)  The fact, if it is a fact, that such patents would be effectively unenforceable therefore lends weight to the view that the moral utility doctrine is unnecessary to discourage people from obtaining such patents in the first place.

But maybe it isn't quite so simple after all.  What if certain practices are legal in some parts of a country but not others?  To cite a more real-world example, according to one source there are thousands of pending cannabis-related patent applications before the USPTO. But while marijuana possession and distribution is now legal in some U.S. states, at least under some conditions, these practices remain illegal in other states and under federal law (though as I understand it, federal prosecutors rarely charge simple possession, and President Biden recently pardoned people convicted of this offense under federal law).  Suppose that, in the not-too-distant future, a patent owner seeks to enforce a patent claiming a new type of cannabis, or some other marijuana-related product or process, in federal court.  (In fact, according to Rajec and Gilden, there was at least one such case pending as of 2020, and a quick Westlaw search reveals a few more since then, though to my knowledge none of these so far have resulted in any rulings on remedies.)  Would a federal court award damages to compensate the patent owner for profits it would have made, or royalties it would have earned, in carrying out a business that (while legal some places) remains illegal under federal law?  I have no idea, but a moral utility doctrine might at least enable courts to dodge the issue--though perhaps at too great a cost given the doctrine's other drawbacks.  (I would note that there is some case law recognizing copyright in legally obscene works; and under Miller v. California, obscenity depends on "contemporary community standards," so perhaps a similar issue has arisen in that context, though I am not aware of any such examples.  Also, Rajec and Gilden cite one 1905 case in which a federal court granted a preliminary injunction in a patent case involving a vibrator, so maybe courts wouldn't find this to be such a difficult issue after all; I don't know.) 

To be sure, the issues presented above may never see the light of day in any real-world patent disputes.  Then again, who knows?  When Angela Mirabole and I wrote what (I think) was the first law review article discussing IP rights in tattoos, some twenty years ago, it wasn't entirely clear we would ever see real cases in which these issues would arise . . . and yet, now we have.  On that example, it may not be all that surprising if courts have to confront the continued viability of the moral utility doctrine, and the related remedies issues, in some subset of patent cases down the road.   

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