Thursday, December 8, 2005

Takings and IP

Ted Frank at Point of Law and Will Baude at PrawfsBlawg both have posts up on takings of intellectual property.  I have to say that I don't really see Frank's connection between Kelo and MercExchange -- the former involves government use of eminent domain to take property to transfer it to another private party, while the later involves court adjudication of the relative rights of two parties with respect to a property right created by statute.  Kelo seems more relevant to another fact pattern that has sparked some discussion lately -- the government taking of patents on drugs like Cipro and Tamiflu to allow other manufacturers to manufacture the drug in question.  Even here, though, eminent domain might not be that relevant.  28 U.S.C. s 1498 provides that:

Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.

This provision seems to authorize the government to allow other manufacturers to produce a patented product so long as compensation is paid to the patent holder.  While this looks a lot like eminent domain, I view it as more of a statutory limit on a statutorily created property right, so I don't think the Constitutional public use issue is relevant in the patent takings context.  I'd also think that this provision would preempt the type of state taking of a patent described by Baude in his post.

UPDATE:  If you have a view on whether state power to take patents would be preempted, please leave a comment.

Ben Barros

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I'm confused. Why does this provision preempt state exercise of eminent domain? It is neither inconsistent with the state regulation nor does it evince a desire to occupy the field.

Posted by: Will Baude | Dec 8, 2005 11:44:03 PM

Fair question. I am in no way a preemption expert. My impression was that patent law does evince a desire to occupy the field, but I may be wrong. I'd welcome comment from anyone with more expertise here.

Posted by: Ben Barros | Dec 9, 2005 7:35:08 AM

Having looked into it a bit, preemption in the patent context seems to be a bit of a confused mess. Leaving aside the specific provision discussed above, I have a hard time imagining that a state can use eminent domain to take a federally created property right -- such a taking would sure seem like an obstacle to the accomplishment of Congress' purposes and objectives in enacting the patent laws. Again, I'd welcome comment from anyone with an informed view on this issue.

Posted by: Ben Barros | Dec 9, 2005 8:08:07 AM

There would appear to be pre-emption if the federal government wanted to "take" a patent. If a state did so, the statute would be inapposite. As to whether a state could exercise eminent domain, the mere fact that the property is "created" by the federal government seems irrelevant. The property is now private property and could be taken, subject to the public use and just compensation limitations. Of course, the state exercizing eminent domain would be subject to all patent law in its use of the "property."

Posted by: Russ Hakes | Dec 9, 2005 8:50:54 AM

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