One of the keys to America’s growth from 1776 to becoming the world’s strongest, most robust and innovative economy within a little more than 100 years is that our Constitution placed importance on both traditional land property rights and intellectual property rights.
Early in America’s history, land-oriented property rights caused our vast nation to be developed productively and efficiently. That fueled economic growth and helped “ordinary” Americas provide for themselves and accumulate some measure of wealth.
But as ideas, inventions and innovation became the primary engine to drive the economy, our nation’s focus on protecting intellectual property helped “ordinary” Americans not only provide for themselves, but also created a vibrant economy where “ordinary” Americans could aspire to and achieve the American dream.
Our Nation’s Founders were wise to include protecting intellectual property rights as one of Congress’ enumerated powers. And the First Congress was wise to create a system for copyright, patents, and the protection of intellectual property rights. That laid the groundwork for America to become the world’s greatest economic power.
The United States has been a leader in innovation since the early 19th century. This is because as a nation, we have respected intellectual property rights and thus incentivized and encouraged innovation. When there is economic and regulatory freedom and when property rights are respected, private enterprise will invest billions of dollars to innovate and create new technologies to solve real-world problems and provide valuable goods and services to the public.
But even something clearly good, useful, and productive can be misused and distorted and become a negative. Such is the case in the intellectual property rights arena. For example, the U.S. Patent and Trademark Office — combined with judicial activism — has created an untenable situation where design patents have morphed into a situation that does more to prevent innovation and stop competition than to protect or encourage real innovation.
Design patents have historically covered the design of an entire patented product. But now, unelected bureaucrats and some unelected judges have changed the concept of a design patent to mean that individualized parts of the larger patented product are also covered. One area where this causes consumers real problems and imposes real costs is with automobiles.
The morphing of the actual meaning of a design patent has allowed automobile design patents to mean that even parts like headlights, taillights, fenders and bumpers are covered by the patent. This means that consumers cannot buy alternative or competing parts. That means repairs cost more and consumers have fewer choices.
This problem was highlighted by the Consumer Federation of America’s Jack Gillis who testified before Congress:
“[C]ar companies are now using design patents, not for the important and legitimate protection of the overall design of their vehicles, but to prevent competition when it comes to getting the parts we need to repair our vehicles.”
Our patent system has traditionally served America well. In fact, it has served the entire world well. It fueled tremendous innovation and creativity and it provided tremendous competition which provided Americans with jobs, economic security, helpful products and medicines.
But the world has also benefited. The medical cures that were innovated in America under our system of intellectual property rights now cure diseases all over the globe.
But when unelected bureaucrats distort the law and the system and unelected judges stop adjudicating the law, but instead undertake to rewrite it, America’s system of constitutional government is subverted. Congress has the sole power to create our patent laws.
The Patent and Trademark Office has the power to implement those laws, but not to rewrite them. And judges have the power to apply the law and facts to disputes and to adjudicate them. But judges do not have the power to rewrite laws and essentially act as a super-Congress.
When the Patent and Trademark Office and judges act outside their authority, it is the American consumer who suffers. But those who have the resources to lobby bureaucrats and to fund endless litigation stand to benefit when our laws are bent and morphed to benefit them.
If your car needs a repair or if the hard drive on your computer needs to be replaced, the question is: Should the government be working to make it so that you cannot get the part you need except from one source? Being forced into one option means that option will be more costly and over time the quality will decline.
Competition forces all competitors to offer as much as they reasonably can for the best possible price. A lack of competition means that a single-source provider can provide whatever quality it likes and charge whatever it can get away with.
Unless Congress does something to stop the abuse of design patents and prevent partial-product or fragmented design patents from essentially eliminating aftermarket parts, consumers will face a shrinking set of options and costs will rise and even insurance premiums will rise. Congress needs to exercise its constitutional power to fix our patent laws.