{"id":7187,"date":"2018-11-14T11:20:39","date_gmt":"2018-11-14T11:20:39","guid":{"rendered":"https:\/\/cpip.gmu.edu\/?p=7187"},"modified":"2026-04-07T20:36:37","modified_gmt":"2026-04-07T20:36:37","slug":"proposed-misuse-of-section-1498-relies-on-the-false-claim-that-patents-are-not-property","status":"publish","type":"post","link":"https:\/\/blogs.uakron.edu\/ualawip\/2018\/11\/14\/proposed-misuse-of-section-1498-relies-on-the-false-claim-that-patents-are-not-property\/","title":{"rendered":"[Archived Post] Proposed Misuse of Section 1498 Relies on the False Claim that Patents Are Not Property"},"content":{"rendered":"

By Kathleen Wills<\/a>*<\/strong><\/em><\/p>\n

The question whether patents are property rights is a continuing and hotly debated topic in IP law. Despite an abundance of scholarship (see here<\/a>, here<\/a>, here<\/a>, here<\/a>, and here<\/a>) detailing how intellectual property (“IP”) rights have long been equated with property rights in land and other tangible assets, critics often claim that this \u201cpropertarian\u201d view of IP is a recent development. Misconceptions and false claims about patents as property rights have been perpetuated in an echo chamber of recent scholarship, despite a lack of evidentiary support.<\/p>\n

Unfortunately, these misleading arguments are now influencing important pharmaceutical patent debates.\u00a0Specifically, a new push to devalue patent rights through the misapplication of an allegedly obscure and misunderstood<\/a> statute, Section 1498<\/a> in Title 28 of the U.S. Code (\u201cSection 1498\u201d), is now being used to promote price controls. Arguments for this push have gained traction through a recent article<\/a> whose flawed analysis has subsequently been promoted by popular media outposts<\/a>. A better understanding of the nature of patents as property reveals the problems in this argument.<\/p>\n

The history of Section 1498 clearly contemplates that patents are property subject to the Takings Clause, which reflects a long-standing foundation of patent law as a whole:\u00a0Patents are private property.\u00a0In an influential paper<\/a>, Professor Adam Mossoff established that from the founding of the United States, patents have been grounded in property law theories.\u00a0While some scholars today argue that the perception of patents began as monopoly privileges, this is only partially correct.<\/p>\n

The arguments usually revolve around certain stated views of Thomas Jefferson, but they ignore that his position was actually a minority view at the time.\u00a0Even when the term \u201cprivilege\u201d was used, it reflected the natural rights theory of property that a person owns those things in which he invests labor to create, including labors of the mind. The term did not reflect a discretionary grant revocable at the will of the government.\u00a0Thus, an issued patent was a person\u2019s property, as good against the government as against anyone else.<\/p>\n

To understand the majority perspective of courts in the nineteenth century, it is important to note that James Madison, the author of the Takings Clause, wrote that the \u201c[g]overnment is instituted to protect property of every sort.\u201d\u00a0What types of property? Courts often used real property rhetoric in patent infringement cases, as seen in Gray v. James<\/em>.\u00a0By 1831, the Supreme Court believed that patent rights were protected just like real property in land was protected. In Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.<\/a><\/em>, the Court established that patent rights represent legitimate expectations similar to property rights in land, which, in turn, are rights secured under the Takings Clause of the Constitution.<\/p>\n

This understanding of patents reflected a stark break from the traditions in English law from which American law developed.\u00a0In England, the \u201ccrown-right\u201d granted the government the right to practice a patented invention wherever and however it pleased.\u00a0In 1843, the Supreme Court in McClurg v. Kingsland<\/a><\/em> explained that while England viewed a patent as \u201ca grant\u201d issued as a \u201croyal favor,\u201d which could not be excluded from the Crown\u2019s use, the American system was intentionally different and patent rights were good against the government. This meant that Congress had to treat patents as vested property rights in the patent owner.<\/p>\n

Justice Bradley enumerated this difference between the United States and England in James v. Campbell<\/a><\/em>:<\/p>\n

\n

The United States has no such prerogative as that which is claimed by the sovereigns of England, by which it can reserve to itself, either expressly or by implication, a superior dominion and use in that which it grants by letters-patent to those who entitle themselves to such grants.\u00a0The government of the United States, as well as the citizen, is subject to the Constitution; and when it grants a patent the grantee is entitled to it as a matter of right, and does not receive it, as was originally supposed to be the case in England, as a matter of grace and favor.<\/p><\/blockquote>\n<\/div>\n

As an article<\/a> by Professor Sean O\u2019Connor explains, this change occasionally caused confusion in American courts when it came to patent owners seeking redress against unauthorized government use. The problem was that there was no single clear mechanism for suing the federal government for injunctive or monetary relief\u2014in fact under sovereign immunity principles, in many cases the plaintiff could not sue the government. Various mechanisms such as implied or quasi contracts were used, but the varying nature of patentees\u2014had they received some government funding leading to their invention or developed it purely outside of government support\u2014complicated things further.<\/p>\n

To provide a venue where citizens could sue the government for patent infringement and other claims, Congress created the Court of Claims in 1855. In 1878, the Court of Claims in McKeever v. United States<\/em> explained that in the United States, patent rights secured the \u201cmind-work which we term inventions,\u201d authorized under the Copyright and Patent Clause in the Constitution.\u00a0By explaining that patent rights derived from Article I in the Constitution, the Court of Claims suggested that patents were as important as other property rights and thus different from grants.\u00a0Prof. O\u2019Connor shows that the status of patents as property, and the recognition of this fact by the courts, solved much of the confusion over the history of American patent law.<\/p>\n

The Supreme Court went on to affirm the Court of Claims\u2019 decision to award damages to a patentee for an unauthorized governmental use of his patented invention. In United States v. Burns<\/a><\/em>, the Court said that \u201c[t]he government cannot, after the patent is issued, make use of the improvement any more than a private individual, without license of the inventor or making compensation to him<\/em>.\u201d In James v. Campbell<\/a><\/em>, the Supreme Court echoed this idea when it held that patents confer owners an exclusive property in their invention, and that the government cannot use such an invention without just compensation any more than the government could appropriate land without compensation.<\/p>\n

By 1881, it was clear that the courts recognized patents as property rights under constitutional protection from government takings, just like real property. With a strong historical record showing that the Supreme Court equated patents as protected property rights, a question remains: Where does the confusion today stem from?<\/p>\n

As Prof. Mossoff explains, the confusion could come from misconstrued inferences of legislative intent regarding the Tucker Act (\u201cAct\u201d). The 1887 version of the Act did not address patents when giving the Court of Claims jurisdiction to hear claims arising from Constitution. This was used by the Federal Circuit in Zoltek Corp. v. United States<\/a><\/em> to deny patents security under the Takings Clause. The Federal Circuit reasoned that patents weren\u2019t constitutional private property. Judge Newman, however, dissented from the petition for rehearing en banc. She highlighted that \u201c[a]lmost a century of precedent has implemented the right of patentees to the remedies afforded to private property taken for public use. There is no basis today to reject this principle.\u201d (The Takings Clause analysis was subsequently vacated when the Federal Circuit eventually took the case en banc.)<\/p>\n

An investigation of the Act\u2019s legislative history also leads to a 1910 committee report (H.R. Rep. No. 61-1288), stating that the government\u2019s unauthorized use of patents qualified as a taking. A few years after, the 1918 amendment adjusted the Act\u2019s language to specifically allow patentees to sue the government for unauthorized uses of their property. Thus, the Tucker Act included patent claims in the kind of suits where the government\u2019s unauthorized use was a constitutional issue, appropriately within the Court of Claims\u2019 jurisdiction. Towards the end of the twentieth century, courts continued to hold that patents were constitutionally protected private property.<\/p>\n

Modern cases have also confirmed that patents are property protected by the Takings Clause.\u00a0Chief Justice Roberts, in Horne v. Department of Agriculture<\/em><\/a>, used a patent case for the proposition that the Takings Clause extends to all forms of property, not just real property.\u00a0Even in Oil States v Greene\u2019s Energy<\/em><\/a>, Justice Thomas went out of his way to assert that the Takings Clause still applies to patents, citing the same case cited by the Chief Justice in Horne<\/em>.<\/p>\n

There has always been a continuous understanding that patents are property, and thus, that Section 1498 is the eminent domain mechanism for the use of patents for the government\u2019s own purposes.\u00a0Popular media has recently misunderstood Section 1498, but the statute is not a price control statute as detailed in a previous post<\/a> in this series. Additionally, forthcoming posts in this series will address other such misconceptions surrounding Section 1498.<\/p>\n

\n

*Kathleen Wills is a 2L at Antonin Scalia Law School, and she works as a Research Assistant at CPIP<\/p>\n","protected":false},"excerpt":{"rendered":"

By Kathleen Wills* The question whether patents are property rights is a continuing and hotly debated topic in IP law. Despite an abundance of scholarship (see here, here, here, here, and here) detailing how intellectual property (“IP”) rights have long been equated with property rights in land and other tangible assets, critics often claim that […]<\/p>\n","protected":false},"author":3627,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[35,38],"tags":[83,557,755,835,1106,1170,1171,1295,1315,1426,1427],"class_list":["post-7187","post","type-post","status-publish","format-standard","hentry","category-patent-law","category-patent-theory","tag-adam-mossoff","tag-fifth-amendment","tag-james-madison","tag-kathleen-wills","tag-patents","tag-propertarian","tag-property","tag-sean-oconnor","tag-section-1498","tag-taking","tag-takings-clause"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts\/7187","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/users\/3627"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/comments?post=7187"}],"version-history":[{"count":3,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts\/7187\/revisions"}],"predecessor-version":[{"id":16595,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts\/7187\/revisions\/16595"}],"wp:attachment":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/media?parent=7187"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/categories?post=7187"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/tags?post=7187"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}