THE INFORMATION VALUE OF PATENT

CLAIMS

Tun-Jen Chiang, George Mason University School of Law

George Mason University Law and Economics Research Paper Series

12-51

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The Information Value of Patent Claims Tun-Jen Chiang†

It is axiomatic that patent “claims” define the scope of the monopoly. The standard justification for this doctrine is the notice theory, where claim text is supposed to accurately describe the invention so that competitors know what is protected. This theory, however, has a problem: Because claims are written by self-serving patentees, they predictably overreach and do not describe the real invention. Due to this fact, a large literature argues that patent claims are valueless and should be abolished or ignored. This Article defends patent claims by articulating a new theory. The point of claims is not to provide a perfect description of the invention, as the notice theory posits. Rather, the point of claims is to provide imperfect information about the invention. The key is that even a slanted claim is better than no claim at all, because courts have no ready way to calculate the correct scope of a patent from scratch. An analogy to contracts of adhesion illustrates the intuition. Like patent claims, contracts of adhesion are self-servingly drafted. Yet such documents are still valuable to courts, because the alternative is for a court to reconstruct the bargain ex post using oral testimony, which is not feasible due to high information costs. The fact that claims provide valuable-but-biased information leads to a conundrum. In order to create an incentive for patentees to draft claims (and disclose information), courts should enforce the resulting text as written. But, in any individual case, a court can create better outcomes by adjusting the claim downward using other sources of interpretative evidence. The result is that courts must balance these competing considerations by giving significant, but not conclusive, interpretative weight to claim text—which is exactly what happens in real life. In this way, the information cost theory provides both a positive explanation for existing practice and a limited normative defense of textualism in patent law.

INTRODUCTION .........................................................................................2 I. THE NOTICE THEORY AND ITS PROBLEMS ........................................6

† Assistant Professor of Law, George Mason University School of Law.

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A. Background on the Patent Document ........................................6 1. The specification describes an inventive embodiment. ..........6 2. The claim covers an inventive idea. ........................................7

B. The Notice Theory of Claims. .....................................................9 C. The Criticisms of the Literature .............................................. 11

1. Dan Burk and Mark Lemley ................................................. 12 2. Oskar Liivak .......................................................................... 13 3. Chris Cotropia ........................................................................ 14 4. Peter Lee ................................................................................ 14 5. Robert Merges and John Duffy ............................................. 15 6. Judge S. Jay Plager ............................................................... 16

II. THE INFORMATION VALUE OF CLAIM TEXT .................................... 17 A. An Analogy: The Value of Contracts of Adhesion ................... 18 B. The Indeterminacy of “the Real Invention” ............................. 21

1. The misconception of the invention as an embodiment. ...... 21 2. The real invention as an economic balance. ......................... 24 3. The impossibility of direct calculation. ................................. 25

C. Claims Elicit Information from Patentees .............................. 30 D. The Imperfection of Claims and Ex Post Adjustment ............ 35

III. LONG-RUN LIMITS ON EX POST ADJUSTMENT ................................ 40 A. Short-run Efficiency: Equal Weight to All Evidence .............. 42 B. Long-run Incentives: More Weight to Claim Text .................. 43 C. Balancing Long-run and Short-run Efficiency ........................ 46

IV. ADDRESSING THE INDETERMINACY OBJECTION.............................. 49 A. The Circular Nature of the Argument. .................................... 51 B. Under-determinacy Versus Indeterminacy. ............................ 59

CONCLUSION .......................................................................................... 60

INTRODUCTION It is fundamental patent doctrine that the claims define patent

scope.1 The commonly given reason for this doctrine is that a claim—a single sentence textual description of the invention that is drafted by the patentee—provides easy-to-comprehend notice to the public and to competitors of the boundaries of the patent.2

A large literature has emerged to attack this core doctrine, with two interrelated criticisms. The first is that claims do not accurately describe what the patentee invented, but are instead merely self-serving statements drafted by the patentee.3 The second is that claims

1 Universal Oil Prods. Co. v. Globe Oil & Refining Co., 322 U.S. 471, 484

(1944) (“The claim is the measure of the grant.”). 2 Merrill v. Yeomans, 94 U.S. 568, 573 (1876). 3 Dan L. Burk & Mark A. Lemley, Fence Posts or Sign Posts? Rethinking

Patent Claim Construction, 157 U. Pa. L. Rev. 1743, 1765 (2009); Oskar

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do not provide predictable boundaries for the patent, because claim construction litigation is notoriously uncertain.4

These two critiques converge on a single policy recommendation: courts should accord little or no weight to the claim text, and instead determine patent scope by discerning the real invention from other sources, such as by looking to the patent specification or to expert testimony.5 Once the real invention is discerned using these external means, the claim should be either abolished outright6 or it should be creatively construed to conform to the externally-determined result.7

This Article provides a counterargument. To be sure, claims are drafted by the patentee and thus will be slanted in the patentee’s own favor. To be sure, claim construction litigation is unpredictable. Even taking all of the critics’ descriptive statements as true, it does not follow that claims are valueless, nor does it follow that the best decisional methodology is for courts to look to external sources—by “external” I mean sources other than claim text—to determine what the real invention is. The key insight is that even slanted claims still reduce the sum total of a court’s adjudication and inaccuracy costs.

An analogy to contracts of adhesion makes the fallacy of the critics’ argument clear. Like patent claims, contracts of adhesion are frequently portrayed as being drafted in self-serving ways by large

Liivak, Rescuing the Invention from the Cult of the Claim, 42 Seton Hall L. Rev. 1, 37–44 (2012) (arguing that claims are a “cult”); see Christopher A. Cotropia, What is the “Invention”?, 53 Wm. & Mary L. Rev. 1855, 1897 (2012); see also ROBERT PATRICK MERGES & JOHN FITZGERALD DUFFY, PATENT LAW AND POLICY: CASES AND MATERIALS 819–20 (5th ed. 2011) (criticizing patent law as “losing sight of invention”).

4 Burk & Lemley, supra note 3, at 1751–61; see also JAMES BESSEN & MICHAEL J. MEURER, PATENT FAILURE: HOW JUDGES, BUREAUCRATS, AND LAWYERS PUT INNOVATORS AT RISK 53 (2008) (arguing patents have “fuzzy and unpredictable boundaries”).

5 See, e.g., Cotropia, supra note 3, at 1909 (arguing for relying on patent specification); Craig Allen Nard, A Theory of Claim Interpretation, 14 Harv. J.L. & Tech. 1, 57–63 (2000) (arguing for reliance on expert testimony and against the so-called “hypertextualist” focus on claim text).

6 Burk & Lemley, supra note 3, at 1784–85. 7 Liivak, supra note 3, at 41–42; Dan Burk, Dynamic Claim Interpretation,

in INTELLECTUAL PROPERTY AND THE COMMON LAW (Shyam Balganesh, ed., forthcoming 2012), available online at http://ssrn.com/abstract=2005251 (arguing that courts should exploit interpretive discretion); Peter Lee, Substantive Claim Construction as a Patent Scope Lever, 1 IP Theory 100 (2010) (arguing for “substantive” claim construction); Chris Cotropia, Patent Claim Interpretation Methodologies and Their Claim Scope Paradigms, 47 Wm. & Mary L. Rev. 49, 127 (2005) (same).

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corporations. 8 Yet courts routinely enforce such form contracts as written. The reason is that abolishing form contracts would not create some utopia where powerless consumers get their real bargain. Rather, the consequence would be a complete breakdown of the judicial system. In every dispute, courts would need to re-discover all the terms of the bargain from scratch (e.g. the subject matter of the bargain, the price, the timeline for performance, etc.), by relying on post-hoc testimony and litigation-driven evidence.9 This would require enormous judicial effort, with long trials and high adjudication costs. In short, even a biased written contract is better than no written contract at all, once we figure in the problem of information costs.10

Applying the analogy to patent law is straightforward. Like the real bargain, the real invention is not easy or costless for courts to discern.11 Abolishing claims will not result in some utopia where all patents cover the real invention: rather, what it will do is ensure that courts spend enormous amounts of judicial effort trying to discern the real invention from scratch. 12 The increased information costs will easily outweigh whatever accuracy benefits the method produces.

At this point, some critics advance a more refined argument: courts should not abolish claims or disregard their text, but they should supplement claim text with external evidence, in order to detect and adjust for the drafting bias of the claim text itself.13 Thus, it would be argued, considering external evidence increases the amount of information and increases the accuracy of results. The seeming implication is that courts should consider all evidence equally, giving claim text no special weight in the process.14

8 See Richard A. Posner, The Law and Economics of Contract

Interpretation, 83 Tex. L. Rev. 1581, 1585 (2005) (noting this critique). 9 A critic is likely to respond that the patent specification is drafted at the

same time as the claims, so it is not post-hoc. For why the specification is nonetheless inadequate, see Part II.B.1.

10 See, e.g., Slamow v. Del Col, 594 N.E.2d 918, 919 (N.Y. 1992) (arguing that a form contract is still the best evidence of the parties’ intent).

11 Keystone Bridge Co. v. Phoenix Iron Co., 95 U.S. 274, 278 (1877). 12 Id. (stating that the development of claims “reliev[ed] the courts from

the duty of ascertaining the exact invention of the patentee by inference and conjecture, derived from a laborious examination”).

13 See, e.g., Lee, supra note 7, at 105 (arguing for a “holistic” process); Burk & Lemley, supra note 3, at 1785 (providing an alternative to abolition that considers claims as part of the “overall description” of the invention).

14 Nard, supra note 5, at 60 (arguing that “[n]o relevant credible evidence is inadmissible merely because it is extrinsic; all such evidence is extrinsic” (quoting Arthur L. Corbin, The Interpretation of Words and the Parol Evidence Rule, 50 Cornell L.Q. 161, 189 (1950))); Lee supra note 7, at 105;

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As Part III will explain, however, this logic has an important and overlooked limit. It is true enough that, in an individual case, a court can achieve the most accurate outcome (i.e. get closest to the real invention) by considering all the evidence, including the claim text plus whatever external evidence can be collected. But, over the long run, if courts give claim text no more weight than external evidence, then patentees will have no incentive to spend money to write claims.15 This would result in de facto abolition and increase judicial information costs across-the-board. Courts seeking to maximize efficiency must therefore balance these competing short-run and long-run imperatives. What this means is that courts should—and in fact do—give primary weight to claim text over external evidence, but they also should not (and do not) exclude external evidence entirely. At bottom, my theory contributes to the literature by both positively explaining existing practice—which the notice theory does not do—and giving a normative justification for it.

A key counterargument that needs to be addressed is the frequency of judicial disagreement over claim construction. At first blush, frequent judicial disagreement seems to suggest that I am wrong to posit that claim text conveys information to judges, because judges seem to be finding the text to be ambiguous in virtually every case.16 As I will explain in Part IV, however, frequent judicial disagreement does not prove that claim text is ambiguous; it only proves that claim construction doctrine is ambiguous. It is a mistake to conflate doctrinal indeterminacy with intrinsic textual indeterminacy. More starkly, claim construction doctrine is conflicting and indeterminate precisely because some judges adopt a methodology of looking primarily to external evidence to determine patent scope, while other judges adopt a methodology of looking only at claim text.17 It is a circular argument to say that this methodological conflict (over whether to use external evidence) itself proves that claim text is indeterminate and that courts therefore should look to external evidence.

The Article proceeds in four Parts. Part I provides a background on patent claims, the notice theory, and the criticisms of the existing literature. Part II describes how claims have an information value that

Burk & Lemley, supra note 3, at 1785; see also Pac. Gas & Elec. Co. v. G.W. Thomas Drayage & Rigging Co., 442 P.2d 641, 645 (Cal. 1968) (arguing that courts should consider “all credible evidence” (emphasis added)).

15 See Eric Posner, The Parol Evidence Rule, the Plain Meaning Rule, and Principles of Contract Interpretation, 146 U. Pa. L. Rev. 533, 544 (1998) (demonstrating this point in the field of contract law).

16 See, e.g., Burk & Lemley, supra note 3, at 1743–65 (arguing that frequent judicial disagreement proves that claims are indeterminate).

17 See infra text accompanying notes 212–221.

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the literature has not considered, and explains how this information value provides a justification for relying on patentee-drafted claims to define patent scope. Part III elaborates on a key implication of the theory—namely, in order to provide an incentive for patentees to draft claims and to convey information, courts must sometimes enforce claims as written even when they are biased towards the patentee. Courts must balance the inaccuracy costs of tolerating drafting slant against the long-run information cost savings. This refutes the literature that argues that courts should always focus on maximizing accuracy in discerning the real invention. Part IV then addresses the indeterminacy objection against claim text. A conclusion follows.

I. THE NOTICE THEORY AND ITS PROBLEMS This Part describes the conventional notice theory of claims and the

criticism that this theory has engendered. Before proceeding, however, I first provide a brief background on what “claims” are, and their role within the overall patent document.

A. Background on the Patent Document A United States patent is a complex document, but its two most

important parts are the specification and the claims. 18 Both the specification and the claims are drafted by the patentee, and both are supposed to describe the patentee’s invention. 19 But although the statute uses the word “invention” in both of these contexts, it refers to two distinct concepts of invention. As this Section will explain, the specification describes an invention in the sense of an embodiment, while the claim describes an invention in the sense of an idea.

1. The specification describes an inventive embodiment. In simplified terms, the specification is the portion of the patent

where technical knowledge about the invention is provided to the public. It is obviously important that the disclosure be sufficiently detailed that the public can gain the full benefit of the invention once the patent expires. 20 Section 112 of the patent statute accordingly mandates that the specification “contain a written description of the

18 A note about terminology: In conventional patent parlance, the two

major components of a patent are known as the “specification” and the “claims.” CRAIG ALLEN NARD, THE LAW OF PATENTS 39 (2008). In the patent statute, however, what is commonly called the specification is instead called the “written description,” while the word “specification” is used to denote the combination of the written description and the claims. Id.; see 35 U.S.C. § 112 (2006). I will follow the conventional usage, and thus when I use the word “specification,” I mean only the written description portion of the patent.

19 35 U.S.C. § 112 (2006). 20 Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 480–81 (1974).

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invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art . . . to make and use the same.”21

In practice, what this means is that the specification describes an embodiment. Only tangible embodiments can be “made,” and so the statute implicitly conceptualizes the “invention” of the specification in these terms. Similarly, the requirement that the specification description be detailed and “exact” reflects a conception of the invention as a tangible embodiment whose precise features can be specified.

For example, the Wright brothers could not have simply written in their patent specification that they invented “a flying machine with wings.” Such an abstract description would have been too sparse to satisfy the requirements of section 112.22 Rather, the Wright brothers had to specify that their particular airplane embodiment had a wooden frame and cloth wings, and that it was controlled using rope pulleys, and numerous other details about their particular wooden glider.23 In sum, their specification described a particular (and rather crummy) wooden airplane embodiment, not the general idea of airplanes.

2. The claim covers an inventive idea. Although it is important that patentees provide lots of technical

detail about their invention, the law has also long recognized that patent scope cannot be limited to literal replication of the details of the specification embodiment.24 To limit the Wright brothers’ monopoly to wooden airplanes with cloth wings would destroy patent incentives, because a clever pirate could copy the underlying idea while changing some minor details (e.g. using solid wings instead of cloth wings).25

Thus, rather than confining patent scope to literal replication of the specification embodiment, patent law has always allowed the monopoly

21 35 U.S.C. § 112. 22 John F. Duffy, Rules and Standards on the Forefront of Patentability, 51

Wm. & Mary L. Rev. 609, 625 (2009) (“abstraction is the very antithesis of the precision required by the disclosure provisions of the Patent Act”).

23 See U.S. Patent No. 821,393 (filed Mar. 23, 1903) (Wright brothers’ patent on the airplane).

24 MARTIN J. ADELMAN ET AL., CASES AND MATERIALS ON PATENT LAW 459 (2d ed. 2003) (“If courts strictly limit the scope of patent protection to the specific examples disclosed in the specification, competitors could readily circumvent the patent through minor changes in design.”).

25 Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 607 (1950) (arguing that confining a patent to literal replication would allow “the unscrupulous copyist” to escape infringement).

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to extend more broadly.26 When stated explicitly, the proposition that patent scope covers an idea (and not an embodiment) is not controversial, 27 though even experienced patent lawyers and academics are often confused on this point.28

What this means is that patent law requires some other way to identify the inventive idea besides the patent specification, because the specification describes the “invention” in the sense of specifying a detailed embodiment. In existing doctrine, the mechanism by which this is done is the patent claim.29

The claim is a single sentence, appearing at the end of the patent, that identifies the core inventive features that the patentee considers important. 30 What this means is that claims leave out extraneous details. For example, the Wright brothers’ claim to the airplane identified three key features:

a. adjustable wings b. a rudder, and c. adjusting the rudder in tandem with the wings.31

26 Id. 27 See, e.g., Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 60 (1998) (“The primary

meaning of the word ‘invention’ in the Patent Act unquestionably refers to the inventor’s conception rather than to a physical embodiment of that idea.”); Cont’l Paper Bag Co. v. E. Paper Bag Co., 210 U.S. 405, 418–19 (1908) (“The principle of the invention is a unit, and invariably the modes of its embodiment in a concrete invention may be numerous and in appearance very different from each other.” (quoting 2 WILLIAM C. ROBINSON, THE LAW OF PATENTS FOR USEFUL INVENTIONS § 485, at 75 (Bos., Little, Brown & Co. 1890))).

28 See infra Part II.B.1. See also EMERSON STRINGHAM, DOUBLE PATENTING 209 (1933) (“This primitive confusion of ‘invention’ in the sense of physical embodiment with ‘invention’ in the sense of definition of the patentable . . . survives to the present day, not only in the courts, but among some examiners in the Patent Office.”).

29 Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc) (“It is a bedrock principle of patent law that the claims of a patent define the invention to which the patentee is entitled the right to exclude.”).

30 A patent can have more than one claim, if the patentee wants to identify multiple combinations of features as critical. See 35 U.S.C. § 112 ¶ 2 (2006) (requiring “one or more” claims).

31 This is a simplified version of their seventh claim. The original (rather convoluted) language is:

In a flying machine, the combination, with an aeroplane, and means for simultaneously moving the lateral portions thereof into different angular relations to the normal plane of the body

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For present purposes of providing a doctrinal background to patent claims, the key point is that every product that utilizes these claimed features is then deemed to infringe the patent, even if the infringing product looks very different from the specification embodiment and incorporates later-developed technology that was not disclosed in the patent specification. 32 For example, a modern Boeing 747 has aluminum wings with adjustable flaps rather than the Wright brothers’ flexible cloth wings, and it adjusts its rudder in tandem with the wings using advanced hydraulics rather than rope pulleys. But the Boeing 747 still contains all three of the claimed features, and it therefore falls within the Wright brothers’ “invention” in the sense that it would infringe the Wright brothers’ patent if that patent had not expired.

In this sense, the claim reflects a very different conception of the invention. Rather than a particular embodiment, the claim covers an idea.33 For patent scope purposes, the Wright brothers did not merely receive their particular wooden glider airplane that they described in their specification. They received the general idea of all airplanes that have wings and a coordinated rudder, and this includes later improved airplanes far beyond anything that they could build or concretely describe.

B. The Notice Theory of Claims. It can be seen from the quick introduction that claims play an

outsized role in the modern patent system. Indeed, they are usually referred to as the most important part of the patent document.34 At

of the airplane and to each other, so as to present to the atmosphere different angles of incidence, of a vertical rudder, and means whereby said rudder is caused to present to the wind that side thereof nearest the side of the aeroplane having the smaller angle of incidence and offering the least resistance to the atmosphere, substantially as described.

U.S. Patent No. 821,393, col. 6 ll. 62–74 (filed Mar. 23, 1903). 32 See Continental Paper Bag, 210 U.S. at 418-19 (“The principle of the

invention is a unit, and invariably the modes of its embodiment . . . may be numerous and in appearance very different from each other.”).

33 See ROBERT C. FABER, FABER ON MECHANICS OF PATENT CLAIM DRAFTING § 10:1.1 (6th ed. 2008) (“The claims should cover the inventor’s concept.”).

34 John F. Duffy, On Improving the Legal Process of Claim Interpretation: Administrative Alternatives, 2 Wash. U. J.L. & Pol’y 109, 109 (2000); see In re Hiniker Co., 150 F.3d 1362, 1369 (Fed. Cir. 1998) (“the name of the game is the claim”); Mark A. Lemley, The Changing Meaning of Patent Claim Terms, 104 Mich. L. Rev. 101, 101 (2005) (“The claims of a patent are central to virtually every aspect of patent law.”).

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bottom, the question that arises in the literature, and being addressed in this Article, is why claims are given such an important role (and whether they should continue to have such a role). After all, claims are drafted by self-serving patentees. Allowing patentee-drafted claims to determine patent scope seems akin to allowing a fox to build the hen-house.

The standard response—the one that would reflexively be given by patent lawyers and judges, and found in virtually every casebook and treatise—is that claims deserve their special place in the patent system because they provide clear ex ante notice of what is covered by the patent to competitors and to the public.35 This is known as the notice theory of claims.

But although the notice theory dominates the discussion, it is at the same time highly unsatisfactory, for two reasons. First, it fails to do much to actually explain or justify the outsized role given to patentee-drafted claims.36 If the point of the notice theory is that we need a textual instrument to delineate patent scope, so that competitors can figure out their legal obligations without litigation, then a textual instrument that is written by a less biased party would serve equally well or even better. For example, we could have the Patent and Trademark Office (PTO) write a sentence delineating the scope of the patent instead of the patentee. The notice theory provides no explanation or justification for entrusting the delineation of patent scope to an obviously biased party.

Second, the notice theory simply fails as an empirical matter. The notice theory argues that claims should provide predictability about infringement.37 But whether a court will finding a particular product to infringe a particular patent claim is notoriously unpredictable. Under the prevailing case law, in a great many cases a decently skilled lawyer will be able to make a reasonable argument that a particular patent claim covers a particular accused product; and also that it does

35 See, e.g., Permutit Co. v. Graver Corp., 284 U.S. 52, 60 (1931) (claims

“inform the public during the life of the patent of the limits of the monopoly asserted, so that it may be known which features may be safely used or manufactured without a license and which may not”); Haemonetics Corp. v. Baxter Healthcare Corp., 607 F.3d 776, 781 (Fed. Cir. 2010) (“Patent claims function to delineate the precise scope of a claimed invention and to give notice to the public, including potential competitors, of the patentee's right to exclude.”).

36 35 U.S.C. § 112(b) (requiring claims). 37 See Gen. Elec. Co. v. Wabash Appliance Corp., 304 U.S. 364, 369 (1938)

(claims “guard against unreasonable advantages to the patentee and disadvantages to others arising from uncertainty as to their rights”).

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not. 38 Whether a court will eventually side with the plaintiff or defendant therefore cannot be easily predicted ahead of time.

These two defects are related. The fact that patentee-drafted claim text is often overbroad means that courts then often compensate for this by creatively construing the language down. A good example is Kinetic Concepts, Inc. v. Blue Sky Medical Group, Inc., 39 where the patentee drafted a claim that facially covered all “wounds” at any location. The court, however, interpreted the claim to cover only skin wounds, in order to adjust for the patentee drafting bias. 40 Such departures from plain text, in turn, create ex ante uncertainty. My point right now is to not praise or condemn this judicial reaction to overbroad claims, it is to point out that this judicial reaction and its associated uncertainty arises because patentee-drafted claims are prone to overreach. The allocation of drafting responsibility to patentees makes absolutely no sense under the notice theory, and the two criticisms most frequently levied on the patent system’s reliance on claims—that this regime results in overbroad patents, and that it results in uncertainty—ultimately trace back to this single fact.

C. The Criticisms of the Literature The problems with the notice theory then lead to a large literature

that criticizes the outsized role given to claim text in patent scope determinations. By and large, all of the critics make the same two arguments that I have already described: (1) claims do not describe the real invention, and (2) the reliance on claims has resulted in significant uncertainty. The conclusion is then that claims have no value for the policy goals of the patent system, and they should accordingly be given a major demotion from their current dominant role. The critics disagree on the precise details—e.g. some argue for

38 See, e.g., Burk & Lemley, supra note 3, at 1791 (“Recent patent cases are

filled with examples of infringers who made reasonable assessments as to what was permissible under a patent's claims and were unpleasantly surprised . . . .”); see generally Kimberly A. Moore, Markman Eight Years Later: Is Claim Construction More Predictable?, 9 Lewis & Clark L. Rev. 231, 233, 239 (2005) (reporting a 34.5% reversal rate for claim construction); ; Russell B. Hill & Frank P. Cote, Ending the Federal Circuit Crapshoot: Emphasizing Plain Meaning in Patent Claim Interpretation, 42 IDEA 1, 2 (2002) (describing judicial uncertainty); Gretchen A. Bender, Uncertainty and Unpredictability in Patent Litigation: The Time is Ripe for a Consistent Claim Construction Methodology, 8 J. Intell. Prop. L. 175 (2001) (same).

39 554 F.3d 1010 (Fed. Cir. 2009). 40 Id. at 1019 (“All of the examples described in the specification involve

skin wounds . . . . To construe ‘wound’ to include fistulae and ‘pus pockets’ would thus expand the scope of the claims far beyond anything described in the specification.”).

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formally abolishing claims, while others would merely make claims afterthoughts in the patent scope analysis—but the basic argument is the same. A sampling of the critics’ arguments follows.

1. Dan Burk and Mark Lemley Perhaps the most prominent critics of claims are Dan Burk and

Mark Lemley. In an article titled Fence Posts or Sign Posts: Rethinking Patent Claim Construction, Burk and Lemley argue that the modern claiming system “isn’t working.”41 The begin by describing how claim construction is highly unpredictable, and how claims accordingly provide little ex ante notice to competitors:

Patent law has provided none of the certainty associated with the definition of boundaries in real property law. Literally every case involves a fight over the meaning of multiple terms, and not just the complex technical ones. Recent Federal Circuit cases have had to decide plausible disagreements over the meanings of the words “a,” “or,” “to,” “including,” and “through,” to name but a few. Claim construction is sufficiently uncertain that many parties don't settle a case until after the court has construed the claims, because there is no baseline for agreement on what the patent might possibly cover.42

Although Burk and Lemley devote considerable space to criticizing the unpredictability of claims and the associated litigation costs, they argue that it is not the biggest problem. The biggest problem, they say, is that a focus on claim text drafted by the patentee’s lawyers detracts from an inquiry into the real invention:

Far more significant is that legal interpretation of words has taken the place of a definition of the proper scope of the invention itself. . . . It should be no surprise that the result of this collateral process bears only a coincidental relationship to the ideal scope of the patent claim. After Markman, we're not often litigating what the inventor did or what her patent should cover, because we are too concerned with what the lawyers did to define what the invention should cover. We have, in other words, taken our eyes off of the ball.43

41 Burk & Lemley, supra note 3, at 1744. 42 Id. at 1744–45. 43 Id. at 1762.

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After describing these failures of modern claiming, Burk and Lemley argue that we should simply abolish claims.44

2. Oskar Liivak Even more scathing than Burk and Lemley is Oskar Liivak, who has

written an article titled Rescuing the Invention from the Cult of the Claim.45 As the title suggests, Liivak argues that the patent system’s reliance on the claim is akin to a cult-like delusion. In Liivak’s view, the “cult of the claim” commits (at least) two grave errors.

First, Liivak argues that “the invention is a substantive, technical concept.” 46 Liivak argues that this substantive conception of the invention is the more appropriate framework to consider issues of patent scope, and that current law has improperly ignored this substantive conception of the invention in favor of its cult-like devotion to claim text.47 Like Burk and Lemley, therefore, Liivak argues that a focus on claim text takes our eyes of the ball (of the real, substantive, invention).

Second, Liivak argues that a cult-like focus on claim text results in confusion and uncertainty. He states: “[C]laim interpretation is just not a uniform process. Courts seem unable to agree on what particular patent claims mean. The promise of certainty made by peripheral claiming appear to be an illusion. In short, the modern peripheral claiming system isn't working.”48

What Liivak concludes from these premises is that courts should focus on the real substantive invention. Unlike Burk and Lemley, he does not advocate abolishing claims altogether, but rather advocates a rule that courts should always “interpret” claim language to cover the “set of embodiments disclosed in the specification.”49 As a practical matter, however, Liivak’s approach would make claims dead letter, because the real inquiry for patent scope becomes not what the claim text says, but what “set of embodiments disclosed in the specification” a court will find.

44 Id. at 1784. 45 Liivak, supra note 3. 46 Liivak, supra note 3, at 5. 47 Id. (“This Article will lay out the evidence in support of this substantive

interpretation of the invention and the benefits that accrue from employing it to structure our patent system.”).

48 Id. at 37 (internal quotations and alterations omitted). 49 Id. at 44.

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3. Chris Cotropia Also making a similar argument is Chris Cotropia. According to

Cotropia, existing patent law operates largely on a view that “the claim is the invention.” 50 This means that courts attach a “heavy presumption” that patent scope is determined primarily by the text of the claim.51 Cotropia argues that this approach is contrary to “basic patent theory” because it “invites disjointedness between protection and the real-world contributions of the inventor.”52

In place of the focus on patent claims, Cotropia argues that patent scope should be defined primarily by what he calls the “external” invention. 53 In practical terms, Cotropia argues that the external invention is primarily found by looking at the patent specification.54 Like Liivak, Cotropia would retain claims, but argues that they should be creatively “interpreted” to match the specification disclosure. 55 Cotropia goes so far as to say that the specification—not claim text—will “dictate” patent scope. 56 Once again, claim text becomes an afterthought in such a regime.

4. Peter Lee Peter Lee has also argued that claims are defective because claim

text does not describe the real invention—what Lee calls the “substantive technological contribution”—and also causes significant uncertainty in patent scope. According to Lee:

These days, entire claim construction disputes revolve around the meaning of words such as “a.” Such a textualist, inward-looking approach to claim construction deprioritizes contextual factors such as expert testimony and industry dynamics that speak to an invention’s substantive technological contribution. This literalist claim construction methodology, moreover, cannot even assert the virtues of certainty and predictability. Claim construction after Phillips is still marred by high reversal

50 Cotropia, supra note 3, at 1886. 51 See id. at 1897 & n. 223 (citing Cotropia, supra note 7, at 123–24). 52 Id. at 1862 & 1897. 53 Id. at 1895 (“The external invention falls more in line with the incentive-

to invent narrative.”). 54 Id. at 1906 (“choosing an external definition of the invention means the

specification plays a heavy role”). 55 Id. 56 Id. at 1909 (“Because claims must be read in light of the specification,

the disclosure dictates claim meaning.”).

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rates and significant internal dissent among judges of the Federal Circuit.57

Somewhat unlike the other critics, Lee does not focus too much on using the patent specification as the primary determinant of patent scope. Instead, he argues that courts should look to “expert testimony and industry dynamics.” What this essentially amounts to is expert testimony and even more expert testimony, because “industry dynamics” would presumably need to be conveyed through expert witnesses. More importantly, like the other critics, Lee’s proposal renders claim text a dead letter, because what matters is not what the claim text says, but what the expert witnesses say about the patentee’s “substantive technological contribution.”

This may seem unfair. In his article, Lee takes considerable pains to argue that his proposal would not render claims dead letter, because he includes an exception that courts would be obliged to give effect to the claim text if claim construction case law gave a clear answer to the infringement dispute.58 But this is a hollow exception, for two reasons. First, an essential predicate to his argument is that current claim construction case law basically never gives a clear answer, 59 so it seems that Lee foresees few if any circumstances where this exception would apply. Second, even if claim construction case law today gives clear answers in some cases, Lee’s methodology would itself generate a body of claim construction case law where courts twist text in ever-more-creative ways to achieve the substantive invention. Over the long run, claim construction case law would therefore become less clear, and the vicious cycle would continue until no clear answers remained.60

5. Robert Merges and John Duffy In their leading casebook on patent law, Robert Merges and John

Duffy repeat the basic critique that patent law has “los[t] sight of invention.”61 According to Merges and Duffy, patent law today focuses excessively on text, and the reliance on text means that courts often

57 Lee, supra note 7, at 104 (emphasis added). 58 Id. at 113 (“it bears emphasizing that under my proposal, substantive

and policy considerations only come into play when traditional claim construction does not yield a clear answer”).

59 Id. at 102, 103, 114 (arguing that determining patent scope using claim text is “inherently difficult to perform,” “fraught with indeterminacy,” “cannot [ ] assert the virtues of certainty and predictability,” and has “well known difficulties.”).

60 See Part IV.A (explaining how this vicious cycle is already responsible for the current uncertainty in claim construction doctrine).

61 Merges & Duffy, supra note 3, at 819.

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adjudicate patent scope “without any of the judges knowing what the inventor’s alleged contribution to the art is.”62

Instead of a textualist procedure, Merges and Duffy argue that courts should “first look into the art to find what the real merit of the alleged discovery or invention is and whether it has advanced the art substantially.”63 If the patentee has made a large social contribution, the court would then be “liberal in its construction of the patent to secure to the inventor the reward he deserves,” while “being more stingy if what the inventor has done works only a slight step forward.”64 Thus, rather than claim text, the real driver of patent scope would be the court’s predicate assessment of the patentee’s contribution. Once this assessment has been made, the court would then “construe” the claim text in creative ways to achieve the predetermined result. Merges and Duffy do not, however, describe any mechanism by which a court could figure out whether the patentee has “advanced the art substantially,” nor do they describe how a court would quantify the amount of reward that a patentee “deserves.”

6. Judge S. Jay Plager It should be no surprise that, given the strong academic tide, the

same argument has gained significant traction among Federal Circuit judges. A recent concurring opinion by Judge Plager of the Federal Circuit encapsulates the same basic argument:

However much desired by the claim drafters, who want claims that serve as business weapons and litigation threats, the claims cannot go beyond the actual invention that entitles the inventor to a patent. For that we look to the written description. I have written elsewhere about the curse of indefinite and ambiguous claims, divorced from the written description, that we regularly are asked to construe, and the need for more stringent rules to control the curse.65

In this short paragraph, Judge Plager can be seen to make three arguments. First, he argues that patentee-drafted claim text—which expresses their “desires”—often does not describe their actual inventions, because these drafters have self-interested motives to obtain undeserved business weapons and litigation threats. Second, he

62 Id. 63 Id. at 820 (quoting Eibel Process Co. v. Minn. & Ont. Paper Co., 261 U.S.

45, 63 (1923) (internal alterations omitted)) (emphasis added). 64 Id. 65 Retractable Techs., Inc. v. Becton, Dickinson & Co., 653 F.3d 1296, 1311

(Fed. Cir. 2011) (Plager, J., concurring).

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argues that reliance on claim text causes frequent litigation that the courts are “regularly” required to resolve. Third, he argues the solution to both of these problems is to look primarily to the patent specification (what Judge Plager calls “the written description”66) to find the actual invention and to determine patent scope. As should be obvious, these arguments mirror the general academic argument in substance. And although this is only a concurring opinion, the same line of thought—albeit less overtly expressed—can be found in more authoritative case law as well.67

Of course, the Federal Circuit is nowhere close to abolishing or ignoring claims as a matter of actual doctrine. Even Judge Plager would surely not go that far if directly presented with the question. But abolition is the logical conclusion of the theoretical argument he is making. All of the critics—with the notable exception of Burk and Lemley—shy away from advocating outright abolition, but they do so not because they see any conceptual value to claims, but only because lawyers hate overt change68 and it is an enormous practical hassle to persuade Congress to amend the patent statute.69

II. THE INFORMATION VALUE OF CLAIM TEXT At first blush, the critics have made quite a formidable case. What

possible justification is there for giving a strong role to a legal instrument that does not accurately describe the real invention, and which involves significant litigation uncertainty to boot? The notice theory provides no possible justification for this. In this Part, I will

66 Judge Plager is following the more precise usage of the patent statute.

See supra note 18. 67 See, e.g., Retractable Techs., Inc. v. Becton, Dickinson & Co., 653 F.3d

1296, 1305 (Fed. Cir. 2011) (Lourie, J., for the court) (“In reviewing the intrinsic record to construe the claims, we strive to capture the scope of the actual invention . . . .”); Kinetic Concepts, Inc. v. Blue Sky Med. Group, Inc., 554 F.3d 1010, 1019 (Fed. Cir. 2009) (limiting a claim to treating a “wound” to treatments of skin wounds, because doing otherwise would “expand the scope of the claims far beyond anything described in the specification”); Autogiro Co. v. United States, 384 F.2d 391, 397 (Ct. Cl. 1967) (“An invention exists most importantly as a tangible structure or a series of drawings. A verbal portrayal is usually an afterthought . . . .”).

68 See generally 1 BRUCE ACKERMAN, WE THE PEOPLE: FOUNDATIONS 17–18 (1991) (describing the “Burkean sensibility” that is “pronounced amongst practicing lawyers and judges”); Larry D. Kramer, The Pace and Cause of Change, 37 J. Marshall L. Rev. 357, 357 (2004) (“Lawyers hate change.”).

69 See Burk & Lemley, supra note 3, at 1747 (“Central claiming would be a radical change, and perhaps the country is not ready to take such a step.”); Liivak, supra note 3, at 41 (arguing that his proposal does not require statutory reform to implement).

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begin making the case for patent claims. Even taking all the critics’ basic factual assertions as true—that claims are biased and do not accurately describe the invention, and that they result in significant litigation and uncertainty—it does not follow that claims are valueless or that they can be safely abolished or ignored. Rather, claims still serve a vital function in the patent system: a claim provides an essential foundation for a court to begin analyzing the question of patent scope. As this Part will explain, without claims, courts would be utterly lost in conducting the inquiry. The only thing worse than our system of highly imperfect claims is to have no claims at all.

A. An Analogy: The Value of Contracts of Adhesion To begin, it is helpful to consider an analogous situation involving a

self-servingly drafted legal instrument. Consider a situation where a large company enters into an agreement with a consumer, such as an automobile insurance company providing car insurance. The parties will almost certainly memorialize their bargain with a contract of adhesion—a written contract drafted solely by the insurance company with no input from the consumer. And, because the written contract is drafted solely by the insurance company, it is likely to contain some of “fine print” that the consumer does not read and does not really consent to. 70 In sum, there will be numerous subtle differences between the real agreement or bargain—the actual meeting of the minds of the parties—and the literal text of the written contract. For clarity purposes, I will use the label “real bargain” to denote the former, and the label “written contract” to denote the latter.

Suppose further that the consumer and the insurance company eventually have a coverage dispute. For example, the consumer’s car is damaged while he is using the car as a taxi, and the consumer had previously told the insurance company representative that he used the car for such a purpose and that he understood the coverage being provided to include such uses. In the written contract, however, there is a clause stating “business use of the vehicle is excluded under this policy.” The consumer had never read this clause. What should a court resolving the dispute do?

Every first year law student is confronted with some variant of this hypothetical in contracts class. As a matter of doctrine, the answer is simple: virtually every court in the United States is likely to enforce the contract as written, to exclude any discussions with the insurance

70 See RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW § 4.9, at 116 (7th

ed. 2007) (“form contracts . . . do tend to be one-sided against the consumer; evidently, competition cannot be relied upon to yield the optimal form” (emphasis in original)).

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company representative as inadmissible parol evidence, and to therefore rule in favor of the insurance company.71 At the same time, this result seems counter-intuitive as a matter of policy and fairness: the consumer obviously did not really consent to the business use exclusion, and enforcing the written contract frustrates the real bargain. A cynic might suspect that courts enforce such written contracts because they are mindless formalists who have a cult-like devotion to text or, even worse, that they are lackeys of large corporations.72

Yet such a view would be both unfair to judges and inaccurate as an explanation. A better understanding of the phenomenon must first consider the alternative. What would happen if courts simply ruled that all contracts of adhesion were unenforceable?

Once we consider the question, it is quite obvious that such a legal rule would be untenable. If courts simply declared all form contracts unenforceable, the result is surely not that large corporations like insurance companies will start negotiating individualized written contracts with every consumer; such an option is cost-prohibitive. Rather, corporations will simply not write any consumer contracts at all.

And what would happen if corporations simply stopped drafting written contracts with consumers? Only a very naïve optimist would think that the result is that consumers will now receive their real bargain and no longer be oppressed by the might of large corporations. Rather, the likely result is that courts would be practically unable to resolve contract disputes. In every case, what would happen is that the consumer would swear up and down that the insurance company promised to cover his business uses; and the insurance company representative would swear up and down that he specifically disclaimed any such coverage. Such conflicting and self-serving testimony would be bad enough, but the contest would not be limited to just one issue. Every facet of the supposed bargain would be fair game: the insurance company could assert that the agreed-upon premium was higher than what the consumer paid, that the consumer breached numerous other covenants and exclusions, and so on; while the consumer would deny each assertion and retroactively make up his own self-serving contractual clauses out of thin air that the insurance

71 2 E. ALLEN FARNSWORTH, FARNSWORTH ON CONTRACTS § 7.12 (3d ed.

1999) (recognizing that the overwhelming majority of jurisdictions retain the plain meaning rule).

72 See, e.g., Todd D. Rakoff, Contracts of Adhesion: An Essay in Reconstruction, 96 Harv. L. Rev. 1173 (1983) (arguing that contracts of adhesion reflect unequal power and ought to be presumptively unenforceable).

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company supposedly breached. A court attempting to resolve this dispute would face enormous problems, because it must essentially reassemble the entire bargain from scratch, and it would need to do so by sorting through a morass of self-serving testimony and litigation-driven evidence. 73 The chance that a court could achieve anything resembling an accurate result—i.e. one that actually matched the real bargain—is miniscule. In realistic terms it would be utterly lost at sea.

In comparison to the chaos that would result, written contracts of adhesion provide a reasonable approximation of the real bargain. The drafting party knows what the real bargain is, and the written contract discloses some of that information to the court. To be sure, the written contract of adhesion will also be slanted to towards to drafter. But it cannot be too greatly slanted: reputation, consumer experience, and competitive pressures limit how far a company can go with the fine print.74 No company can, for example, get away with fine print stating that the consumer will pay their life savings to the company and get a peppercorn in return—they will immediately go out of business with no customers. The point is that, from a systemic viewpoint, enforcing written contracts of adhesion is better than the alternative of courts essentially taking blind stabs in the dark trying to recreate every bargain from scratch.

Stated another way, written contracts of adhesion are an imperfect mechanism to partially solve a fundamental information problem. In the abstract, it is highly tempting to say that courts should simply discover and then enforce the real bargain. It is equally tempting to say that written contracts of adhesion are biased and self-serving and therefore detract from the real bargain, in the same way that critics of patent claims argue that they detract from the real invention.75 In real life, however, courts need some mechanism to find out what the real bargain was. The critics who attack contracts of adhesion as detracting

73 See Trident Ctr. v. Conn. Gen. Life Ins. Co., 847 F.2d 564, 569 (9th Cir.

1988) (arguing that relaxing the plain meaning rule “creates much business for lawyers and an occasional windfall to some clients [but] leads only to frustration and delay for most litigants and clogs already overburdened courts”).

74 Posner, supra note 70, at § 4.9, at 116 (arguing that reputation and competition cannot produce the optimal form contract but do limit abuse).

75 Indeed, Burk and Lemley make this precise analogy. Dan Burk & Mark A. Lemley, Quantum Patent Mechanics, 9 Lewis & Clark L. Rev. 29, 50 (2005) (arguing that a textualist approach to claims is analogous to the “discredited” plain meaning approach to contract interpretation). Given that the plain meaning approach is in fact followed by the overwhelming majority of jurisdictions, Farnsworth, supra note 71, § 7.12 at 294, Burk and Lemley seem to have a rather odd definition of “discredited.”

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from the real bargain often fail to consider the information problem and seem to assume that the real bargain can be determined both accurately and easily. The reality is far different. The real bargain cannot be determined with either accuracy or ease, and in the absence of a contemporaneous written record it probably cannot even be approximated. Written contracts of adhesion provide a valuable contemporaneous written record that at least approximates the real bargain, even if it is also slanted in favor of the drafter. Rather than detracting from the real bargain, a written contract of adhesion is actually the most reliable evidence of it.76

Applying this analogy to patent claims is straightforward, and my argument in the remainder of this Part will elaborate on this analogy in two steps. In Section B, I will argue that, like the real bargain, courts cannot directly determine what the real invention is—they face a severe information problem. In Section C, I will then argue that written claims are a mechanism to overcome this information problem—an imperfect mechanism to be sure, but the best that we have. The sum of these two arguments is that claims have value.

B. The Indeterminacy of “the Real Invention” 1. The misconception of the invention as an embodiment.

In order to see why courts cannot easily determine what “the real invention” is in a particular case, it is first necessary to have a working definition of the underlying concept. One common intuition is to conceptualize “the invention” as the specification embodiment.77 After all, the patent statute says that the specification describes the “invention,”78 so limiting patent scope to the specification embodiment is the most natural reading of this statutory text. And even without reference to the patent statute, many people intuitively think that an invention is a gadget that has physical form, i.e. an embodiment.79 A good example of someone making this argument is Oskar Liivak, who argues that the invention is “the set of embodiments conceived and

76 Slamow v. Del Col, 594 N.E.2d 918, 919 (N.Y. 1992). 77 See, e.g., Autogiro Co. v. United States, 384 F.2d 391, 397 (Ct. Cl. 1967)

(“An invention exists most importantly as a tangible structure or a series of drawings.”); Howard T. Markey, Why Not the Statute?, 65 J. PAT. OFF SOC’Y 331, 333 (1983) (“Ideas are never patentable. Only embodiments of an idea, i.e. an invention, may be patented.”).

78 35 U.S.C. § 112(a) (2012). 79 Giles S. Rich, The Relation Between Patent Practices and the Anti-

Monopoly Laws—Part II, 24 J. PAT. OFF. SOC’Y 159, 172 (1942) (stating that an embodiment is “[p]opularly but inaccurately called ‘invention.’”).

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disclosed by the inventor in enough detail that they can be reduced to practice.”80

Liivak is not alone in this conceptualization of the invention as the specification embodiment, though he is the most explicit about it. Chris Cotropia defines the real invention—what he calls “the external invention”—in very similar terms:

The “external invention” is an invention that exists independently of the patent document and prior to the filing of the patent application. The inventor defines it by engaging in some real-space activities and recognitions, which can range from the simple—notes and diagrams on a tablecloth—to the complex—the actual building and commercialization of the invention before filing the patent application.

Although Cotropia does not explicitly say that the invention is a physical object (i.e. an embodiment), this passage clearly reflects such a conceptualization. The invention is something that can be “actually buil[t],” and only a physical embodiment can be actually built. More generally, this conceptualization of the invention as an embodiment is common throughout the patent literature.81

If we accept this conceptualization of the invention, then the critics are right, and my entire argument falls apart. The physical object that the patentee created is easy for a court to discern—it can simply be wheeled into the courtroom for all to see. Not only this, the patent specification will provide a detailed description of the physical embodiment, including all the details about how to make and use it.82 Claims are not necessary to help a court determine what the patentee “invented,” if by that question we mean what physical embodiments are disclosed in the patent specification and reducible to practice. The intuitive conceptualization of the invention as an embodiment thus makes the critics’ argument seem very appealing. Everything about their argument falls into place if we accept this initial conceptualization.

To see why this conceptualization is incorrect, however, consider again the Wright brothers’ patent on the airplane. If we take the

80 Liivak, supra note 3, at 5. 81 See, e.g., Markey, supra note 77, at 333; Robert P. Merges & Richard R.

Nelson, On the Complex Economics of Patent Scope, 90 Colum. L. Rev. 839, 845 (1990) (“the disclosure must be sufficient to enable someone skilled in the art to make and use all the embodiments of the invention claimed in the patent.”).

82 35 U.S.C. § 112.

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conceptualization of the invention as an embodiment seriously, the logical implication is that the monopoly they should receive—which of course is defined by the “invention”—would cover only literal replication of a wooden glider with cloth wings. This is the only type of airplane that the Wright brothers actually described in the specification with sufficient exactness and detail that another person in the aviation field could build the same airplane. The Wright brothers themselves could not build (and thus could not have described how to build) even a World War I fighter,83 let alone a modern jet. In short, as previously discussed in Part I.A.2., the fatal problem with conceptualizing the invention as an embodiment is that it eviscerates patent incentives.

In a later part of his article, Liivak attempts to rebut this objection by arguing that the invention can be characterized abstractly, as the inventor’s principle.84 This would presumably mean that the Wright brothers’ invention is not only their particular wooden glider, but all airplanes that use the Wright brothers’ inventive principle of coordinating the wing and the rudder. Applying this standard overcomes the problem of eviscerating patent incentives.

But it is important to see here that Liivak is contradicting himself. A principle is not a concrete set of embodiments. An invention can either be a set of embodiments that are described by the inventor in sufficient detail that they can all be built at the time of patent filing, or it can be an abstract principle that encompasses later-developed improvements. It cannot be both at the same time.

I do not mean to pick on Liivak in particular. This subtle conflation of the two distinct conceptions of the “invention”—as an embodiment and as a principle—is pervasive throughout patent law.85 My point is that exposing this fallacy is key predicate to exposing a weakness in the critics’ argument. By and large, all of the critics treat the real invention as self-evident and easy to discern; and they accordingly

83 See G.D. Padfield & B. Lawrence, The Birth of Flight Control: An

Engineering Analysis of the Wright Brothers’ 1902 Glider, 107 Aeronautical J. 697, 717 (2003) (stating that “after 1908 the rate of progress in aviation was quite startling; progress which, in many ways, would leave the Wright brothers behind”).

84 Liivak, supra note 3, at 49 (“Broad claims are allowed where the patentee discloses and claims a broad conception. This can be done rather easily where a patentee understands the principle behind the invention.”).

85 See Tun-Jen Chiang, The Levels of Abstraction Problem in Patent Law, 105 Nw. U. L. Rev. 1097, 1120–22 (2011) (describing how judges and scholars oscillate between these two conceptions); Kevin Emerson Collins, Enabling After-Arising Technology, 34 J. Corp. L. 1083, 1088–89 (2009) (arguing that courts “oscillate between the full-scope and single-embodiment doctrines”).

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devote almost no attention to how courts would gather the necessary information to perform the inquiry. Such a position is only sustainable for as long as we treat the real invention as an embodiment. Once we realize the importance of consistently conceptualizing the invention as a principle, the problems in the critics’ argument become more manifest, as the remainder of this section will discuss.

2. The real invention as an economic balance. Once we understand that the “invention” is not an embodiment but

an idea or principle, a problem quickly arises: a principle can be characterized at multiple levels of abstraction, all of which are equally accurate as a matter of logic. For example, consider again the Wright brothers’ invention of the airplane. Is the inventive principle:

1. Artificial powered flight? 2. Artificial powered flight using wings and a rudder? 3. Artificial powered flight using cloth wings and a wooden rudder?

Each of these levels of abstraction is a plausible description of the Wright brothers’ inventive principle. But they have very different implications for the real world. A monopoly that covers all powered flight would cover, for example, later developed helicopters and a future antigravity spaceship. This would provide very strong incentives for the Wright brothers, but would also impose very high monopoly costs. A monopoly that covered only powered flight using wings would not cover helicopters, but would still cover all later jet airplanes including those made with aluminum and modern composite materials. This represents an intermediate level of both incentives and monopoly costs. Finally, a monopoly that covered only airplanes using cloth wings would cover essentially nothing at all, which produces no monopoly costs but also no ex ante incentives.

How should a court choose among these competing alternatives? Most critics at some level acknowledge that the choice should be based on the economic consequences. That is, courts should choose the level of abstraction that optimally balances the incentive benefits and monopoly costs of the patent. For example, Burk and Lemley say that courts should look for the “ideal scope of the patent.”86 Cotropia echoes this by arguing that that the invention should be defined by “basic patent theory,” 87 which in standard parlance means the economic

86 Burk & Lemley, supra note 3, at 1762. 87 Cotropia, supra note 3, at 1913.

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balance between incentives and monopoly costs.88 And Lee explicitly recognizes that his proposal ultimately calls for courts to “calibrat[e] patent scope to maintain incentives to invent without unduly burdening sequential developments.”89

Saying that the real invention is conceptually a matter of finding economically optimal patent scope is not to say that courts must necessarily phrase the doctrinal test in such an explicit manner. For example, they can instead say that the invention is the patentee’s embodiment plus all substantially similar embodiments—this is the doctrinal test that Burk and Lemley seem to propose. 90 But such a doctrinal test will only raise the question of what “substantial similarity” means—what counts as “substantial” and as “similar”? A legal construct such as a substantial similarity test must ultimately have an underlying theory, or it will be an incoherent jumbled mess.91 It is hard to see what that underlying theory would be except to achieve optimal economic balancing of incentive benefits and monopoly costs; 92 and the critics themselves seem to envision the substantial similarity test as operating as a proxy for this economic question.93

3. The impossibility of direct calculation. Once we recognize that the real invention is not an embodiment, but

an idea at a level of abstraction that represents optimal patent scope, there is a real tension with the critics’ glib assumption that courts can

88 Merges & Nelson, supra note 81, at 868 (“The analysis has concentrated

on how changing patent coverage affects the balance between incentives to the inventor and underuse of the invention due to patent monopolies.”).

89 Lee, supra note 7, at 111. 90 Burk & Lemley, supra note 3, at 1768 & 1785 (arguing for a return to

nineteenth century doctrine, which used a substantial similarity test); see also Cotropia, supra note 3, at 1910–13 (arguing for greater reliance on the doctrine of equivalents, which uses a substantial similarity test).

91 The best analogy is “reasonableness” in tort law. The Hand formula of B<PL is useful precisely because it provides an underlying theory for what reasonableness means. See RICHARD A. POSNER, TORT LAW: CASES AND ECONOMIC ANALYSIS 1-9 (“This casebook is premised on the belief that the Hand formula . . . provides a unifying perspective in which to view all of tort law.”). Without an underlying theory, a doctrinal test becomes a matter of “I know it when I see it”—an incoherent mess. Cf. Jacobellis v. Ohio 378 U.S. 184, 197 (1964) (Stewart, J., concurring) (describing the obscenity doctrine in this way).

92 See Michael J. Meurer & Craig Allen Nard, Invention, Refinement and Patent Claim Scope: A New Perspective on the Doctrine of Equivalents, 93 Geo. L.J. 1947, 1967–68 (2005) (arguing that the doctrine of equivalents is based on an economic efficiency theory).

93 See supra text accompanying notes 86–90.

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discern the real invention with ease, or at all. It is fanciful to believe that judges or juries—even aided by expert witnesses—can determine anything remotely resembling the optimal scope of a patent without astronomical adjudication costs in the form of years-long trials and detailed economic studies. A direct assessment is simply not possible. A methodology of directly calculating social benefits and costs cannot begin to achieve even a reasonable approximation of optimal patent scope.

The basic defect of the critics’ argument is that they dramatically underestimate this basic information difficulty. Indeed, they can be fairly said to ignore it outright. Every single one of the critics fails to articulate anything resembling a reasonable methodology for calculating economically optimal patent scope. A look at the critics’ actual proposals is telling.

The most common proposed methodology by far is that courts should discern the real invention by looking to the patent specification.94 I count at least Judge Plager, Oskar Liivak, and Chris Cotropia to make this proposal. But this comes back to the logical fallacy that I have already discussed in Part II.B.1. If “the invention” being discussed were an embodiment, then looking primarily to the specification would make a lot of sense: the specification discloses the embodiment that the patentee invented, and courts have access to this information at low cost.95 The problem is that such a conceptualization of the invention, carried to its logical conclusion, will eviscerate patent incentives. And once we acknowledge that the “invention” is not an embodiment, it becomes apparent that the specification provides grossly inadequate information for the patent scope inquiry.96 The key question in patent scope debates is not whether patentees should receive coverage for the embodiments disclosed in the specification—everybody agrees that they should, but everybody also agrees that that amount of protection

94 See, e.g., Cotropia, supra note 3, at 1909–10; Liivak, supra note 3, at 44;

see also Retractable Techs., Inc. v. Becton, Dickinson & Co., 653 F.3d 1296, 1311 (Fed. Cir. 2011) (Plager, J., concurring) (“[T]he claims cannot go beyond the actual invention that entitles the inventor to a patent. For that we look to the written description.”).

95 See Christopher A. Cotropia, Patent Claim Interpretation and Information Costs, 9 Lewis & Clark L. Rev. 57, 68–72 (2005) (arguing that the specification produces information about the invention).

96 See id. at 73 (“Under the specification-only system, both the patentee and the public were unable to easily and consistently define the specific invention the patent protected.”).

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is inadequate. 97 The key question is how much more protection patentees should receive, in covering undisclosed and later improvements. 98 If I disclose one particular wooden glider airplane with cloth wings in the patent specification, how many other airplanes should I get? Almost by definition, the specification does not answer that question.99

In contrast to the specification, Peter Lee argues courts should look primarily to the testimony of expert witnesses and other industry participants to determine patent scope. 100 This is slightly better—experts and other industry participants might know something about the economic benefits and costs of the patent. But, unless Lee is suggesting that courts should hold patent trials running for months and years, and to summon a veritable army of experts and industry participants, the amount of information that can be collected on the question will still be tiny relative to the amount required to actually reach meaningful conclusions. After all, economists have repeatedly attempted to calculate the net social benefits and costs of patents, with little success.101 In short, while it is theoretically possible for courts to compute optimal patent scope using expert testimony if we assume

97 Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 607

(1950) (arguing that confining a patent to literal replication would allow “the unscrupulous copyist” to escape infringement).

98 See Royal Typewriter Co. v. Remington Rand, Inc., 168 F.2d 691, 693–94 (2d Cir. 1948) (Hand, J.) (observing that this is the key question and that “courts have differed, and always will differ, as to the allowable latitude in a given instance”).

99 Chris Cotropia tries to avoid the intractable dilemma by a rhetorical trick. He argues that the invention is the specification embodiment, but that patents can protect more than the invention when needed to achieve proper incentives. See Cotropia, supra note 3, at 1911 (“Protection over, at most, the full external invention may not be enough to incentivize people to invent.”). But this is a cop-out. If patents protect more than the invention, then what is the new theoretical measure by which patent scope is to be defined? How do courts get enough information to implement that measure, whatever it is? Cotropia’s proposed doctrinal test—substantial similarity—is an empty label unless it has an underlying theory. See supra text accompanying note 91. And if the underlying theory is economic efficiency (and Cotropia strongly implies it is), then that just brings us back to the problem of having a court trying to determine economically optimal patent scope.

100 Lee, supra note 7, at 104; see also Nard, supra note 5, at 57–63. 101 See, e.g., Fritz Machlup, An Economic Review of the Patent System,

Study No. 15, Subcommittee on Patents, Trademarks, and Copyrights of the Senate Committee on the Judiciary, 85th Cong., 2d Sess. 79–80 (1958) (“No economist, on the basis of present knowledge, could possibly state with certainty that the patent system, as it now operates, confers a net benefit or a net loss upon society.”).

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zero information cost and unlimited resources; it is not practically feasible to do so in real life. The problem is not only that paid experts in litigation have little incentive to testify honestly102—though that too is a problem—the bigger problem is that the experts simply would not be able to calculate the optimal patent scope with any confidence even if they were (miraculously) motivated to testify honestly.103

Finally, some critics simply provide no methodology at all. For example, Burk and Lemley argue countless times throughout their article that courts should look for “what the patentee actually invented” and for “the ideal scope of the patent”; but they never describe how courts would actually get the information to do this.104 One gets the distinct impression that they think it is so easy and self-evident that it needs no elaboration; but the task of discerning optimal patent scope is anything but easy.

Of course, there is one method by which judges and juries could make direct assessments of optimal patent scope despite the information difficulty, and at very low adjudication cost: They can simply make uninformed stabs in the dark on the question.105 At the end of the day, this is what the critics’ proposed regime would amount to—they would throw the question to the jury and have it worked out in the black box, under some open-ended test such as “substantial similarity.” 106 A court could mask the emptiness of its decision by conducting a long trial, reading the specification ten times, collecting a library’s worth of prior art, and calling a great number of impressively credentialed expert witnesses; but the ultimate decision would still be empty and uninformed. As the Supreme Court once observed about the

102 Nard attempts to overcome the honesty problem by suggesting court-

appointed experts, see Nard, supra note 5, at 63, though it is not clear that judges can easily identify truly neutral experts, especially if some of the parties involved are powerful companies who dominate an industry.

103 Cf. Frank H. Easterbrook, The Limits of Antitrust, 63 Tex. L. Rev. 1, 11 (1984) (“If we assembled twelve economists and gave them all the available data about a business practice, plus an unlimited computer budget, we would not get agreement about whether the practice promoted consumers’ welfare or economic efficiency more broadly defined.”).

104 They do propose a doctrinal test: substantial similarity. But without more elaboration on how courts would actually go about assessing substantial similarity, this is an empty formulation. See supra text accompanying note 91.

105 See Frank H. Easterbrook, On Identifying Exclusionary Conduct, 61 Notre Dame L. Rev. 972, 980 (1986) (“What we need is a set of intelligent presumptions, not a stab at the ultimate question of efficiency.”).

106 See Burk & Lemley, supra note 3, at 1768 & 1785 (arguing for substantial similarity test); Cotropia, supra note 3, at 1910–12 (arguing that patent scope should cover “equivalents” to the specification embodiment when needed to achieve economic efficiency).

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pre-claiming era—which is essentially what the critics want to return to—it entailed “laborious” effort by courts while producing results that were no better than “inference and conjecture.”107 This was because of an intrinsic lack of information.

To summarize, the critics are caught in an intractable dilemma. To the extent that they conceptualize the invention as an embodiment, that conceptualization provides an easy way to discern the real invention—read the specification—but it results in eviscerating patent incentives. To the extent that they conceptualize the invention as representing an optimal economic balance, they have suggested no workable mechanism for courts to discern the answer to this difficult question beyond random guessing. And there is no conceptual middle ground between the two alternatives. A doctrinal test such as “substantial similarity” must ultimately fall back on some underlying conception of the invention, or it too will be just a random guess.

One counterargument is that nobody really suggests that courts should attempt to calculate optimal patent scope perfectly. The critics are most charitably understood as arguing that courts should attempt an intermediate position: they should collect enough information such that a decision is not a total stab in the dark, and yet they should not hold year-long trials calling thousands of expert witnesses and trying for perfection. But given the inherent difficulty of judicially determining optimal patent scope, it seems safe to say that anything short of year-long trials with thousands of experts will result in decisions that are essentially total stabs in the dark. It is worth emphasizing in this respect that the entire premise of having a patent system at all is that judges do not have sufficient information about the social costs and benefits of a particular patent108—if they did, it would be more efficient to have judges award taxpayer-funded prizes than to award patent monopolies.109 And this would still be true even if judges could only make approximate guesses of social benefits and costs—roughly-optimal prizes are still more efficient than roughly-optimal monopolies. Thus, the existence of the patent system is predicated on the assumption that judges simply cannot make any meaningful direct assessments of social costs and benefits. If this assumption is wrong, the solution is not to abolish claims, but to abolish patents altogether.

107 Keystone Bridge Co. v. Phoenix Iron Co., 95 U.S. 274, 278 (1877). 108 Louis Kaplow, The Patent-Antitrust Intersection: A Reappraisal, 97

Harv. L. Rev. 1813, 1844 (1984). 109 Id.; Michael Kremer, Patent Buyouts: A Mechanism for Encouraging

Innovation, 113 Q.J. Econ. 1137, 1140 (1998) (“financing research with monopoly profits . . . is generally less efficient than financing research with tax revenue”).

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Once we understand the true economic nature of “the real invention” and that there is an intrinsic problem of information scarcity, it becomes obvious that a legal mechanism for determining patent scope must address this underlying information problem. Contrary to the critics—who often insinuate that the existing reliance on claims arises because judges are lazy 110 and mindlessly formalistic 111 and thus uninterested in finding the optimal scope of the patent or the real invention112—the underlying problem that patent doctrine needs to solve is not a defect in judicial motivations. The problem is that judges acting in perfectly good faith lack the information to tailor patent scope in any kind of sensible way. What the critics often seem to imagine as an easy matter—sufficiently easy that the methodology is given little or no thought—is in fact far harder than any of them give credit for.

Having established the fundamental information difficulty, a reader might reasonably ask: what do patent claims have to do with it? One can concede that calculating the right patent scope without claims is very difficult, and that courts lack the information to do it accurately. But, unless the mechanism of patent claims contributes to solving this problem in some way, all of the foregoing discussion would be irrelevant. The next section describes how claims provide a mechanism to convey some limited and imperfect information about the real invention to courts.

C. Claims Elicit Information from Patentees If a direct calculation of optimal patent scope cannot yield good

results, then how should the patent system make informed decisions about patent scope? As part of answering that question, consider the fact that, of all the people in the world, the patentee has the best information on the optimal scope of the patent.113 As a matter of first principles, the optimal scope of the patent is the lowest amount of monopoly that would induce an inventor to create and disclose the

110 Peter Lee, Patent Law and the Two Cultures, 120 Yale L.J. 2, 31 (2010)

(arguing that judges are “cognitive misers”). 111 Id. (arguing judges adopt “hypertextualism” in claim construction to

avoid engaging with complex questions); Dan L. Burk & Mark A. Lemley, Policy Levers in Patent Law, 89 Va. L. Rev. 1575, 1672 (2003) (arguing that the Federal Circuit is overly formalistic and resists policy questions).

112 Burk & Lemley, supra note 3, at 1762 (arguing that judges have taken their eyes “off the ball” of the question of ideal patent scope).

113 Clarisa Long, Information Costs in Patent and Copyright, 90 Va. L. Rev. 465, 496-97 (2004) (“In almost all cases, owners will know more about their intellectual goods than observers will.”).

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technology described in the specification. 114 The patentee obviously knows what the minimum degree of scope that he needs is.115

The obvious difficulty here is that patentees have no incentive to honestly disclose their superior information. Rational self-interested patentees do not want to be awarded the absolute minimum degree of scope that is needed to induce their filing of the patent. Rational self-interested patentees want the broadest monopoly that they can get. This creates an incentive for dishonesty, and how to combat this incentive for dishonesty will be a key focus of my analysis. As a predicate matter, however, it is important to see that patentees have more information about optimal patent scope than any other actor. The trick is to get them to disclose this private information honestly. In economic parlance, what patent law needs is an information forcing mechanism.116

Claims serve as this information-forcing mechanism. A patentee who writes a claim down takes a public position that he believes this particular claim to represent the optimal degree of patent scope for his particular contribution. The very fact that the patentee must take a definitive position on the issue forces the patentee to reveal some of his private information. A patentee will not fully disclose his true belief of optimal patent scope, but at the same time he will disclose a reasonable approximation of it.

That last sentence requires some explanation, because the intuitive counterargument is that a patentee would have no incentive to be reasonable and disclose an approximation of his true beliefs. If patentees had an information advantage, it would seem at first blush that they should ruthlessly exploit it and claim as much as possible. If patentees really had more information than courts, why don’t they just claim “everything under the sun” and then rely on the fact that courts do not have enough information to determine if that degree of patent scope is correct or not? What forces patentees to disclose—or at least to partially disclose and thus approximate—their true beliefs about optimal scope?

114 See Graham v. John Deere Co., 383 U.S. 1, 11 (1966) (framing the

question as whether the invention would “be disclosed or devised but for the inducement of a patent”).

115 See Kintner v. Atl. Communication Co., 240 F. 716, 717 (2d Cir. 1917) (“the patentee is conclusively presumed to have known what he invented or discovered, better than did any one else, at the time he applied for a patent”).

116 See generally Ian Ayres & Robert Gertner, Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, 99 Yale L.J. 87, 98 (1989) (discussing information forcing rules);

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The answer is that patentees are constrained by an intrinsic asymmetry between the effort required to take an affirmative position, and the effort required to react to a position that someone else has taken. Stated another way, it is easier—less information intensive—for a decision-maker to determine that a position is incorrect than it is for the same decision-maker to affirmatively state what the correct answer is.

To see this point, consider the following assertion: “The economically optimal speed limit on interstate highways is 55 miles per hour.” Virtually everyone will be able to say with a good amount of confidence that this is false. The sentence misstates what the economically optimal speed limit on interstate highways is. In locations where a 55 mph speed limit is in force, nobody obeys it; and if people did, traffic would come to a standstill, causing commerce to slow and the economy to suffer. In short, we can easily determine that the statement is not correct.

Now I ask you to state what the economically optimal speed limit on interstate highways actually is. In all likelihood, you would have no idea where to start. Is it 65? 70? 80? We simply do not have adequate information to answer the question, and any answer we gave would be nothing more than a rough guess. In sum, it is easier to know that a position someone else has taken is incorrect, than it is to affirmatively take the correct position yourself.

Applied to the context of patent claims, a patentee who writes a claim takes a position that a court can then evaluate. It is true that, in the absence of any enforceable constraint, a rational patentee would blatantly lie and assert a monopoly that covers absolutely everything. But the patentee is constrained—he cannot claim too much or a court (or the PTO) will strike the claim down as invalid. The key here is that it is easier for a court or the PTO to determine whether a claim is wrong—i.e. whether the claim is over-broad and results in excessive monopoly scope—than for a court or the PTO to affirmatively state in the first instance what the right degree of monopoly scope is. Thus, courts and the PTO only evaluate patentee-drafted claims, and they do not affirmatively state the approvable degree of patent scope in the first instance.117 Even after the PTO rejects a patentee-drafted claim, the usual procedure is to send it back to the patentee for redrafting: the PTO merely says the patentee is wrong; it does not say what would be right.

117 It is for this reason that the patent system also disallows so-called

“omnibus claims.” Ex parte Fressola, 27 U.S.P.Q.2d 1608, 1612 (Bd. Pat. App. & Inter. 1993). An omnibus claim is a claim that says something like “I claim whatever the law allows.” Such an empty claim discloses no information.

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Once we understand the information forcing function of claims, the practice of relying on patentee-drafted claims is revealed to be an efficient solution to the patentee’s information advantage and a way for the patent system to minimize information costs by forcing patentee disclosure.118 This is, of course, in marked contrast to the notice theory, which regards this allocation of drafting responsibility to be inexplicable and unjustifiable.119

It is crucial here to emphasize that we are dealing with a highly imperfect world. The constraint on patentees is admittedly not perfect. Courts will not always be able to tell that an asserted position is wrong, just as we do not know whether the optimal speed limit is 65 or 75 miles per hour. Rather, courts and the PTO can only constrain patentees from too blatantly over-claiming. At the edges, patentees will be able to exploit their information advantage and claim somewhat more than the optimal degree of patent scope. The point is that, on the whole, having patentees “make the first move” forces them to disclose some information, and gets us closer to the optimal patent scope than any other alternative. If we had some other (less informed) party such as the PTO or a court affirmatively delineate patent scope in the first instance, then patent scope would be a complete stab in the dark. A predictably overbroad—but not too overbroad—claim is better than a complete stab in the dark.

A second key feature of the information forcing function of claims is that a patent claim forces the patentee to state his position early in the life of a patent, at the time of patent filing. Burk and Lemley are particularly critical of this feature of claiming practice. According to Burk and Lemley, the information available to a court increases as time goes along: society gets more information about the social benefits and costs of a patent once people actually start making and selling widgets.120 In their view, it makes absolutely no sense for the patent system to place any reliance on claims that are drafted early in the life of a patent, when less information is directly available.121

118 At least one critic had previously recognized this function of claims. See

Cotropia, supra note 95, at 72–74 (describing claims as an “information producing” mechanism). Yet Cotropia now seems to attach little value to claims, preferring instead to rely primarily on the specification to “dictate” patent scope. Cotropia, supra note 3, at 1909.

119 See supra text accompanying note 36. 120 Burk & Lemley, supra note 3, at 1782 (arguing that claims improperly

attempt to “set forth the maximal boundary of the patent grant during the application process, before the measure of the inventor's contribution or the different variants that competitors might adopt can be properly assessed”).

121 Id. (arguing that ex post decision-making is superior, and that claims turn this temporal allocation “on its head”).

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Burk and Lemley’s critique makes a lot of sense if one adopts their basic worldview that centers on having courts make direct assessments of optimal patent scope. The information that a court can directly collect about social costs and benefits increases over time: a court can itself directly gather evidence of the market impact of a patent on the patentee and on competitors only after there is a market. Therefore a judicial assessment of patent scope is better done later than earlier.

But a patentee’s information does not change over time. And the predicate of my argument is that the patent system cannot rely on courts making direct assessments of optimal patent scope, but rather must rely on forcing patentees to disclose their private information. And a patentee is more likely to be honest if forced to disclose earlier rather than later.122

The reason that early disclosure is more likely to be honest is a phenomenon that I and several leading critics have discussed elsewhere: over time, competitors will develop new and unforeseen products that compete with the patentee.123 The patentee, once he has seen these new products, will have a strong incentive to adopt a litigation position that says these new products fall within his ex ante expected monopoly reward, even if this is not true.124

A good example of this kind of opportunistic revisionism is Liebel-Flarsheim Co. v. Medrad, Inc.,125 which concerned a patent covering a type of powered syringe. As the patentee first conceived the syringe, it required a “pressure jacket” to operate. In his initial claims, which were drafted at the time of filing, the patentee expressly stated that his invention covered only syringes with a pressure jacket.126

What happened afterwards is that a competitor developed a jacketless powered syringe. Seeing this competitor product made the

122 Tun-Jen Chiang, Fixing Patent Boundaries, 108 Mich. L. Rev. 523, 543

(2010). 123 Id.; Robert P. Merges, Software and Patent Scope: A Report from the

Middle Innings, 85 Tex. L. Rev. 1627, 1653 (2007) (describing patentee opportunism in light of new competitor products); Mark A. Lemley & Kimberly A. Moore, Ending Abuse of Patent Continuations, 84 B.U. L. Rev. 63, 111 (2004) (same).

124 See Christina Bohannan & Herbert Hovenkamp, IP and Antitrust: Reformation and Harm, 51 B.C. L. Rev. 905, 940 (2010) (arguing that late claims “give the patentee the opportunity to add things not foreseen when the original application was filed or, worse yet, to hijack the inventions of third parties whose work the applicant did not anticipate”).

125 358 F.3d 898, 905 (Fed. Cir. 2004). 126 Id. at 909.

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patentee have a sudden change of heart. 127 All of a sudden, the patentee began to argue that the pressure jacket was not a core part of his invention. Rather, the patentee argued that the scope of his patent should cover all powered syringes, with or without pressure jackets.128 This was the position that the patentee adopted during litigation.129

In the end, the patentee in Liebel-Flasheim lost.130 But the point of the example is how patentees can better tailor their positions (i.e. lie) after they see the previously-unexpected competitor product. This type of patentee opportunism is extremely common, and both myself and several leading claim critics agree it is normatively undesirable.131 For example, Mark Lemley is both a leading critic of patentee opportunism and of patent claims—he sees no contradiction in these positions and indeed thinks that patent claims enable opportunism because they are so malleable. 132 But Lemley’s cure of abolishing claims makes the disease worse, not better. Only by having a patent claim, memorialized at the time of patent filing, do we even know what the patentee’s initial position was. Without a written record of the patentee’s position on patent scope at the time of patent filing—i.e. a claim—we would not be able to discern an opportunistic change in position and thus cannot begin to combat it. The only thing worse than a somewhat malleable and revisable claim is no claim at all.

D. The Imperfection of Claims and Ex Post Adjustment I do not want to overstate my argument. It is important to reiterate

that claims do not delineate the invention perfectly. Recognizing the imperfection of claims represents a major difference between my theory and the notice theory.

The notice theory requires claims to be perfect in two respects. First, claims must be accurate, in the sense that the claim must describe the real invention.133 Second, claims must be precise, in the sense that the

127 Id. 128 Id. 129 Id. 130 Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d 1371, 1380 (Fed. Cir.

2007). 131 Chiang, supra note 122, at 562; Merges, supra note 123, at 1653 (calling

it “misappropriation by amendment”); Lemley & Moore, supra note 123, at 111 (calling this “particularly offensive”).

132 Burk & Lemley, supra note 3, at 1757 (arguing that “[w]ords change in meaning” and that such linguistic evolution dooms reliance on text).

133 See Merrill v. Yeomans, 94 U.S. 568, 573–74 (1876) (stating that “nothing can be more just and fair, both to the patentee and to the public, than that the former should understand, and correctly describe, just what he has invented”).

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text communicates the underlying information (the real invention) to the reader with no ambiguity or vagueness, and completely dictates a single right answer in every factual situation.134 These two linguistic concepts are different. A claim that said, “I claim my real invention” is completely accurate, but it is totally imprecise. The first is a requirement about matching the underlying information communicated to the social goal of the patent system; while the second is a requirement that the claim text be a proper vehicle to communicate the information.

The critics are quite right in observing that real-life claims do not live up to the impossible expectations of the notice theory. Patentees are not intrinsically public-minded, and it is impossible for courts (or the PTO) to so fully police them as to compel perfect accuracy in claim drafting. This is the more obvious problem, and it is the one that both the critics and I have focused on.135 But it is worth mentioning here that claim text also cannot be absolutely precise, because language is inherently somewhat imprecise. It is unlikely that the text in every claim in every patent can reflect the patentee’s true intentions with perfect clarity, so even if patentees were trying to communicate the real invention they could not perfectly succeed.136 In a system with over 500,000 patent applications every year, accidental ambiguities and other unintentional drafting errors will inevitably occur at least some of the time.137 Thus, even if we could overcome the problem of patentee motivations, claim text is not a perfect vehicle by which a good motivation can always be perfectly implemented.138

Where the critics go wrong is to make the perfect the enemy of the good. Because claim text is admittedly not perfect, they immediately

134 See id. (stating that there is “no excuse for ambiguous language or

vague descriptions”). 135 See, e.g., Retractable Techs., Inc. v. Becton, Dickinson & Co., 653 F.3d

1296, 1311 (Fed. Cir. 2011) (Plager, J., concurring) (arguing that claim drafters want “business weapons and litigation threats”); Burk & Lemley, supra note 3, at 1753 (arguing that “many applicants don’t specify what they mean by ambiguous technical language, either because they don’t think about the issue or because they intend to exploit the ambiguity in obtaining or enforcing the patent”).

136 See Douglas Lichtman, Substitutes for the Doctrine of Equivalents: A Response to Meurer and Nard, 93 Geo. L.J. 2013, 2016 (2005) (discussing the impossibility of perfect drafting).

137 Id.; see also Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 731–32 (2002) (“The language in the patent claims may not capture every nuance of the invention.”).

138 See infra Part IV.B (explaining that claim text is under-determinate, but also that it is not indeterminate).

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jump to the opposite extreme and argue that it is worthless. My basic move is to point out this false dichotomy and introduce some middle ground to the debate.139 Even an instrument that communicates only imperfect information about the invention is still valuable to courts. The difference between the notice theory and my theory thus lies with both the degree of perfection and the relevant audience: the notice theory posits that claims provide perfect certainty for competitors to plan business activities, while my theory posits that claims provide information for judges to make decisions about patent scope.

If claims exist to help judges resolve disputes, but are imperfect instruments for this purpose, is there anything judges can do about the imperfection? Implicitly recognized in the previous section is that courts (and the PTO) must engage in some amount of what I will call “ex post adjustment.” That is, when a patentee has blatantly over-claimed, courts must be able to decline enforcement of the overbroad monopoly or else there would be no constraint on even the most egregious over-claiming. As a practical matter, courts can constrain patentees through two mechanisms. When a patentee writes an overbroad claim, a court can either (a) strike the claim down as invalid, or (b) creatively “construe” the claim to be narrower than what its language actually says. The practical effect of each option is similar: in both cases, the patentee ends up with a monopoly scope that is narrower than what the claim text itself would indicate. And the result of this ex post adjustment is to mitigate the patentee’s drafting bias and bring the actual monopoly reward awarded closer to the ideal scope of the patent.

In the next Part, I will describe how ex post adjustment has some important limitations, so it is not a panacea that gets us to optimal patent scope. At this point, however, three implications of the above analysis are worth making explicit.

First, ex post adjustment calls for consideration of external evidence. In order for courts (and the PTO) to engage in ex post adjustment, they must be able to determine that the claim text is overbroad. And a court must obviously refer to something other than the claim text itself to make that determination, i.e. it must refer to external evidence. This represents a concrete practical difference between my theory and the notice theory. The notice theory assumes that claim text itself is a perfect description of the invention, and thus requires neither ex post adjustment nor external evidence.

139 See Festo, 535 U.S. at 731–32 (recognizing that “the most efficient rule”

requires balancing the need to accurately “capture every nuance of the invention” against the need to “conserve judicial resources”).

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Second, ex post adjustment can take the form of either invalidity or creative claim construction, so which one should a decision-maker use? In practice, courts use both mechanisms, because they have different pros and cons.140 Creatively narrowing a claim rather than striking the claim down has the obvious benefit of avoiding an extreme result that clearly under-incentivizes the patentee (giving zero scope), and it has a political benefit to a court in terms of avoiding an overt disagreement with another branch of government (invalidating a claim that the PTO had previously allowed).141 But it has the cost of forcing the court to take an affirmative position on the correct scope of the patent, which is more information intensive. 142 Conversely, invalidating a claim reduces the information cost, but it creates an extreme zero-scope outcome and also a political cost. Courts must weigh the pros and cons of each route in the individual case, and unsurprisingly the result is that courts do not consistently take one approach or the other. On the other hand, the PTO faces no such tradeoff, because it creates no conflict with another branch of government in rejecting a claim, and a rejected claim does not result in zero scope because a patentee can submit an amended claim in response to a rejection.143 Therefore, the PTO only rejects claims, and it never creatively narrows them.144

Third, notwithstanding the fact that my theory calls for ex post adjustment and calls for external evidence, the key point of my theory is that it uses claim text as a baseline. The role of external evidence under my theory is only to supplement the claim and to adjust patent

140 Compare Turrill v. Michigan Southern & N.I.R. Co., 68 U.S. 491, 510

(1863) (holding that claims should be construed narrowly if necessary to save their validity) with Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir. 1999). (“[I]f the only claim construction that is consistent with the claim's language and the written description renders the claim invalid, then . . . the claim is simply invalid.”). See also See Roger Shang & Yar Chaikovsky, Inter Partes Reexamination of Patents: An Empirical Evaluation, 15 Tex. Intell. Prop. L.J. 1, 25 (2006) (“In almost every patent litigation, the defendant must choose between two competing strategies: arguing for a narrow claim interpretation to avoid infringement, or arguing for a broad claim interpretation to invalidate the patent.”).

141 See 35 U.S.C. § 282 (2006) (stating that claims issued by the PTO are entitled to a presumption of validity).

142 See supra Part II.C. 143 37 C.F.R. § 1.111(a) (2012) (permitting amendments in response to a

rejection); see also Lemley & Moore, supra note 123, at 64 (“One of the oddest things about the United States patent system is that it is impossible for the U.S. Patent and Trademark Office . . . to ever finally reject a patent application.”).

144 See SRAM Corp. v. AD-II Eng’g, Inc., 465 F.3d 1351, 1359 (Fed. Cir. 2006) (courts give no weight to PTO interpretation of claims).

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scope relative to the baseline that the patentee first sets through the claim. As explained in Section C, the predicate insight here is that it is easier for courts to react and adjust a baseline using external evidence, than for courts to delineate optimal patent scope in the first instance using such evidence.

A logical implication of this point is that there is an important timing difference between when patentees write their claim, and when the patent system ultimately determines patent scope. As described above, the patent system requires patentees to write the claim at the earliest feasible point in time in order to keep claims as honest as possible. A corollary is that it allows courts to adjudicate ultimate patent scope at the latest feasible time—during infringement proceedings—in order to maximize the information that is available for courts to engage in ex post adjustment.145 In the interim, it interposes an expert agency, namely the PTO, to make a preliminary determination, where the expertise of the agency can (slightly) mitigate the inherent lack of public information.146 This arrangement makes a great deal of sense once we view the function of claims not as providing ex ante notice to competitors,147 but as providing information for courts to engage in ex post adjudication of patent scope.

The fact that my theory calls for claims to form the baseline for ex post adjudication makes it very different from the critics’ theory, even though we are in agreement that claims are imperfect and that courts should consider some amount of external evidence to overcome the imperfection. We have a serious practical disagreement on how much that “some” is, but the theoretical disagreement runs deeper. In the critics’ telling, the claim is a valueless—indeed affirmatively harmful—self-serving statement that deserves no role because it detracts from the real invention.148 The critics argue for using external evidence to replace claim text, so that external evidence provides the baseline to determine the real invention. At a conceptual level, they see no social value to having claims, though they are mostly content to leave claims

145 See (arguing that more information becomes available to courts over

time). 146 See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 426 (2007) (noting that

the standard rationale for the presumption of validity is PTO expertise). 147 Quite ironically, for all their criticisms of the notice theory, the critics

share its fundamental—and erroneous—assumptions about the function of claims as providing ex ante delineation of scope for the benefit of competitors. See Burk & Lemley, supra note 3, at 1782 (arguing that claims function to delineate patent scope ex ante and that this arrangement is unwise).

148 Id. at 1746 (“If patent-claim terms lack the virtue of certainty and are in fact doing mischief in the patent system, perhaps we should begin to rethink the whole enterprise.”).

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in place as undead zombies simply to avoid the hassle of statutory amendment.149 In my telling, by contrast, claims provide the crucial baseline, while external evidence merely supplements the claim text and facilitates some adjustment at the edges. The contribution of this Part over the prior literature, in sum, is to establish that claims in fact have significant and positive social value, contrary to the conventional view that they detract from the real inquiry of the patent system.

III. LONG-RUN LIMITS ON EX POST ADJUSTMENT At this point, the critics may respond that my argument is not that

different from their proposal as a practical matter. Under my theory, courts and the PTO must constrain the patentee by deciding if the claim is too greatly overbroad and engaging in ex post adjustment if it is. My proposal thus requires courts to consider external evidence. And, with the important exception of Burk and Lemley, the critics generally do not advocate for the formal abolition of claims. Thus, at face value, nearly everyone agrees that courts should consider the claim text plus external evidence.

In this Part, however, I shall explain that we have very different practical conceptions of how frequently external evidence should be considered, and how much weight such evidence should be given vis-à-vis claim text. The critics would essentially have courts consider unlimited amounts of external evidence, and give such evidence the same weight as, or even more weight than, the claim text. As a long-run matter, I shall argue that this is an incorrect approach.

It is helpful to consider again the analogy to contract law. In contract law, everyone agrees that courts should consider the written contract, but there is a long-running debate about how much extrinsic evidence courts should consider in addition to the written contract. There are two stylized extreme positions that have both been well articulated: Arthur Corbin is famously associated with the position that courts should consider all the evidence when interpreting a contract, without disfavoring extrinsic evidence.150 The other extreme

149 See Liivak, supra note 3, at 41 (“strongly” agreeing with Burk and

Lemley’s theoretical position, but arguing that it does not require “any significant statutory reform” to implement). Even Burk and Lemley, who do advocate for the statutory abolition of claims, express the reservation that “perhaps the country is not ready to take such a step” because of inertia. Burk & Lemley, supra note 3, at 1747.

150 Arthur L. Corbin, The Interpretation of Words and the Parol Evidence Rule, 50 Cornell L.Q. 161, 188–89 (1965) (arguing that “extrinsic evidence is always necessary” to contract interpretation, and “no relevant evidence [should be] inadmissible simply because it is extrinsic”); Arthur L. Corbin, The Parol Evidence Rule, 53 Yale L.J. 603, 622 (1944) (“No parol evidence

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is the traditional plain meaning rule, which in its strongest form says that courts may consider only to the written contract itself, so long as an outcome (regardless of its fairness or fit with the real bargain) can be discerned using the text alone.151 As Eric Posner has observed, real life courts take intermediate positions on the spectrum between these two extremes.152 At the same time, as even Corbin concedes, they tend generally to be closer to the pole of plain meaning.153

The critics of patent claims are making essentially the same argument as Professor Corbin, almost to the letter. In Section A, I will explain that they have an important insight: In any given individual case, their methodology will produce the best outcome for that case.

However, one might pause to consider the fact that the overwhelming majority of jurisdictions have rejected Corbin’s approach in contract law. 154 Despite the Corbin approach’s obvious benefits, courts tend to follow the plain meaning approach. This might suggest that there is a limitation to the Corbin approach. To be sure, one can dismiss all the unfavorable judicial decisions as inspired by a cult-like devotion to mindless formalism.155 But it should at least give us pause.

In Section B, I shall describe an important limit to the Corbin approach. In the long run, the patent system needs to provide some incentive for patentees to write claims. As a practical matter, courts can only provide this incentive by giving patentee-drafted claim text more interpretative weight than other sources of evidence. As Eric Posner has explained in the contract law setting, taking the Corbin approach to its extreme in every case leads to the long-run consequence of having no written contracts.156 It is for this reason that courts must give the plain meaning of contract text some special consideration and disfavor extrinsic evidence. The same is true in patent law.

that is offered can be said to vary or contradict a writing until by process of interpretation the meaning of the writing is determined.”).

151 5 JOSEPH M. PERILLO, CORBIN ON CONTRACTS § 24.7, at 33 (rev. ed. 1998) (hereinafter “Corbin on Contracts”) (describing the plain meaning rule).

152 Posner, supra note 15, at 538–40. 153 5 Corbin on Contracts § 24.7 at 34 (“the ‘plain meaning rule’ is adhered

to by a majority of the jurisdictions in the United States”). 154 Farnsworth, supra note 71, at § 7.12, at 294 (“A few other courts have

shown sympathy for Corbin’s view, but the overwhelming majority of courts retains some kind of plain meaning rule.”).

155 See 5 Corbin on Contracts § 24.7, at 36 (arguing that the plain meaning rule survives because of a “dogmatic” belief in “seemingly universal and unchangeable rules”). Cf. supra text accompanying notes 110–112 (showing how some patent claim critics make the same argument).

156 Posner, supra note 15, at 544.

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This does not mean that courts should therefore go to the opposite extreme of robotically following the text in every case, either in contract law or in patent law. Rather, as Section C discusses, courts should balance the competing considerations of short-run accuracy and long-run incentives. The result is that courts should consider some external evidence, but they should give claim text more interpretative weight. As Part IV.A will later discuss, this is basically descriptive of what patent courts do right now. My theory thus provides both a normative and descriptive theory for patent claims.

A. Short-run Efficiency: Equal Weight to All Evidence If we take my point in Part II as a given—that is, if we assume for

present purposes that claim text provides valuable but imperfect information about the invention—then what should a court do as a policy matter? A common intuition is to say that the job of a court is to get the most accurate outcome possible.157 That is, a court should try and get to the real invention and to optimal patent scope.158

Of course, even in an individual case, a court is constrained in its pursuit of accuracy by finite adjudication resources. Courts cannot realistically hold years-long trials, nor can they summon thousands of experts. Thus, our initial focus on accuracy must be qualified: courts should attempt to get the most accurate outcome at a given level of adjudication resources. But, beyond resource constraints, the intuition is that there should be no artificial limits on the information that courts can consider. If a court has a budget of $1 million for resolving a particular case, it should aim to allocate this budget in the most efficient manner possible in terms of maximizing the pursuit of truth. A court would collect as much relevant evidence as its budget allows, and then give all the evidence it collects equal interpretative weight.

By “equal weight,” I do not mean that the court would say, “witness A, the upstanding citizen, says the defendant stabbed the victim, while witness B, the known habitual liar, says the defendant did not, and because I give all evidence equal weight it is a toss-up.” I mean that a court will consider all the evidence in light of its credibility and in the totality of the circumstances, to get to the result that is most likely to be reflective of the underlying factual truth on the question at issue

157 Kenworthey Bilz, We Don’t Want to Hear It: Psychology, Literature, and

the Narrative Model of Judging, 2010 U. Ill. L. Rev. 429, 442 (observing that the notion that courts should sacrifice accuracy for some other social purpose “causes rebellion in the hearts of . . . many lawyers, policy makers, and academics”).

158 See, e.g., Burk & Lemley, supra note 3, at 1762 (arguing that courts should look for the ideal scope of the patent); Lee, supra note 7, at 104 (arguing that courts should “optimiz[e] patent scope”).

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(here, optimal patent scope). The contradistinction is to a regime where courts are required by a pre-set rule to favor or disfavor certain types of evidence. For example, a court that excludes a bloody knife that was obtained through an illegal search from a criminal trial thereby gives this evidence zero weight. The court does so not because it thinks the knife is unreliable evidence, or that the underlying factual truth is that the defendant is innocent, but because the pre-set exclusionary rule mandates that evidence obtained in violation of the Fourth Amendment be given zero weight.159

As a matter of definition, therefore, a court that is seeking to maximize accuracy in the individual case would give all the evidence equal weight. But this formulation is not just a rhetorical trick. The substantive point is that, if the goal is simply to maximize accuracy, the law should rarely have categorical rules that exclude broad swaths of evidence from consideration. 160 A court seeking to get closest to optimal patent scope should consider all the evidence it can collect on this empirical question within its allocated budget, and this includes both the claim text—which is easily available because it has already been drafted—and all reasonably collectible extrinsic evidence. 161 There should be no pre-set rule disfavoring external evidence, and everything should be a matter of totality-of-the-circumstances evaluation.162 This type of free-floating inquiry is precisely what the critics argue for.163 Thus, if the only goal of the patent system were to maximize accuracy in the individual case, the critics would be correct.

B. Long-run Incentives: More Weight to Claim Text It is a familiar proposition that the legal system will frequently

sacrifice accuracy in an individual case for other social policy goals.164 159 Mapp v. Ohio, 367 U.S. 643, 655 (1961). 160 See Davis v. United States, 131 S. Ct. 2419, 2423 (2011) (narrowing the

exclusionary rule because it detracts from maximizing truth). 161 See Nard, supra note 5, at 60 (citing Corbin and arguing that all

evidence should be considered in claim construction). 162 See Burk & Lemley, supra note 3, at 1778–79 (analogizing this to the

rules versus standards debate). 163 Id.; Lee, supra note 7, at 105 (arguing for a “holistic” approach that

allows more “context”); Cotropia, supra note 3, at 1913 (arguing for a “case-by-case” approach that “contextualizes” the inquiry). Cf. Posner, supra note 15, at 569 (observing that “[w]hen Corbin argues that meaning depends on context, he seems to mean that the more context admitted as evidence, the better are the court’s chances of discovering the meaning of the contract”).

164 GLEN WEISSENBERGER & JAMES J. DUANE, FEDERAL RULES OF EVIDENCE: RULES, LEGISLATIVE HISTORY, COMMENTARY AND AUTHORITY § 501.3, at 200 (2001) (noting that most evidentiary privileges have this character).

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The idea often causes discomfort among lawyers, judges, and academics,165 but it a pervasive part of the legal system. I have already given the example of the exclusionary rule in the Fourth Amendment context, which excludes evidence for long-run policy purposes (to deter future constitutional violations) that are not related to maximizing accuracy in the individual case. 166 Similarly, evidentiary privileges such as the attorney-client privilege exclude a suspect’s confession to his lawyer not because such a confession is unreliable, but because without the privilege there would be no confession in the first place, and there would be a social cost in terms of hindering effective communication between lawyers and their clients.167 More generally, the entire patent system is about this kind of tradeoff between short-run welfare and long-run incentives. 168 If we were only concerned about short-run welfare, then the best outcome in any given patent case is to invalidate the patent, because the research that is being patented has already been developed and is therefore sunk. The fundamental insight of the patent system is that this kind of short-term thinking leads to pernicious results, because it means there will be no long-run incentive for future researchers to file patent applications.

A remarkably similar dynamic plays out in the case of the role of external evidence in determining patent scope. As above, the short run optimal result in a given case—where the patent claim has already been drafted—is to give everything equal interpretive weight. Such a methodology maximizes the information available to a court and gets us closest to optimal patent scope. But such a regime has a long run cost: If courts simply took the patentee’s claim for what it was worth in the totality of the circumstances, and gave it no particular weight, patentees would have no incentive to spend money hiring attorneys to draft claims. The long term result would be de facto abolition, which would increase judicial information costs for all the reasons that I have already described.

To see why giving claim text no special interpretative weight would lead to de facto abolition, consider first a situation where the patentee does not draft a claim, and so the only evidence available to a court is external evidence. The court would thus take a blind stab at the

165 Bilz, supra note 157, at 442. 166 Davis, 131 S. Ct. at 2426–27. 167 See Upjohn Co. v. United States, 449 U.S. 383, 395 (1981) (arguing that

the adversary is “in no worse position than if the communications had never taken place”).

168 Michael Abramowicz, The Uneasy Case for Patent Races over Auctions, 60 Stan. L. Rev. 803, 809-10 (2007) (“This trade-off between static and dynamic efficiency is familiar to patent scholarship.”).

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optimal scope of the patent based on the external evidence. The result of this approach will be highly random and arbitrary—the court will often award too much scope or too little. 169 But the average result would be to grant the socially optimal amount of scope, because on average a court is just as likely to err on one side as on the other. Thus, as a matter ex ante expectation, the patentee would expect this amount of monopoly reward, even though there would be a lot of uncertainty and variation around the average.

Now consider what happens if the patentee writes a claim. The external evidence available in the case does not change—the patentee would still file the same specification, and the same experts would still be available to testify (and their knowledge of the industry and the technology will be the same). As described in Section A, under the extreme version of the totality-of-the-circumstances analysis, the court would therefore still on average grant the socially optimal patent scope, by using the external evidence to fully correct whatever drafting bias the patentee includes in his claim. Thus, the patentee’s ex ante expected monopoly is the same whether or not he writes a claim. Because the patentee has no expected gain from writing a claim, but writing a claim costs money, he will not write a claim.170

One might respond that a patentee writing a claim would reduce the variance in the outcomes, so that a risk-averse patentee would have an incentive to write a claim.171 But the variance would decrease only if courts gave outcome-changing weight to the claim text in at least one instance (i.e. shifted the outcome because the claim was added), and that change in the outcome in that one instance would also (slightly) shift the overall average towards the scope indicated by the claim text, and away from the optimal scope of the patent. At the extreme, we can imagine a situation where the court considered only the claim text, which is equivalent to saying claim text gets 100% of the interpretative weight. In such a regime, the variance of the results would be very low, because courts will always reach the result indicated by the claim.172

169 See supra Part II.B.3. 170 See Posner, supra note 15, at 544 (“Because the parties gain nothing by

putting the marginal promise in the writing, they do not use writings.”) 171 Risk-aversion is the standard assumption in economics, and it is the

assumption that I follow here. But see Burk & Lemley, supra note 3, at 1752–53 (suggesting that patentees prefer ambiguity and uncertainty); cf. John R. Allison, Mark A. Lemley & Joshua Walker, Patent Quality and Settlement Among Repeat Patent Litigants, 99 Geo. L.J. 677, 704 (2011) (hypothesizing that patent owners are risk averse).

172 The variance would not be strictly zero, in that the text itself would not always specify an outcome for every unforeseen situation. See supra text accompanying notes 136–138. But the variance will be low because text will

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But the mean around which this variance coalesces is the scope indicated by the claim text, not the optimal scope of the patent.

What we have, then, is a spectrum with two extremes. We can have an ex ante expected outcome of optimal patent scope with high variance (if courts gave equal weight to all evidence). We can have an ex ante expected outcome of the patentee-claimed scope with low variance (if courts gave 100% weight to claim text). Or we can have an intermediate position of slightly-broader-than-optimal scope with a moderate amount of variance. But it is not possible to get to the eat-your-cake-and-hold-it-too position of having ex ante expected optimal patent scope with low variance. In more lawyerly terms, a court that applies a totality-of-the-circumstances test creates good outcomes but with low predictability; while a court that applies a rule-like textualist approach creates less good outcomes but with greater predictability. This tradeoff between the certainty of textualism and the flexibility of a totality-of-the-circumstances test is well known.173 Patent law is no exception to this basic jurisprudential dilemma.174

C. Balancing Long-run and Short-run Efficiency What the two stylized examples show is that there is a fundamental

tradeoff between the patent system’s policy goal of minimizing long-run information costs by incentivizing the drafting of claims, and the patent system’s policy goal of maximizing accuracy in the individual case. As a practical matter, courts can only seek to achieve each goal through the mechanism of calibrating the weight they give to claim text vis-à-vis external evidence, or in other words how textualist they will be. The dilemma is that the respective policy goals pull in different directions on this question.

One counterargument is that we have an alternative mechanism to ensure that patentees write claims: we can invalidate the entire patent

specify an outcome for most situations, especially as the patentee would have an incentive for high precision if courts always followed the text. See infra Part IV (refuting the argument that text can never specify an outcome).

173 See Duncan Kennedy, Form and Substance in Private Law Adjudication, 89 Harv. L. Rev. 1685, 1687–89 (1976) (describing the tradeoff between ex ante certainty and perfection in achievement of good outcomes).

174 But see Lee, supra note 7, at 104 (arguing that textualism has not brought certainty to patent law); Burk & Lemley, supra note 3, at 1791 (same); Cotropia, supra note 3, at 1913 (same). As Part IV.A will explain, the reason that textualism has not brought certainty to patent law is because the Federal Circuit is not actually applying textualism, not because patent law has some magical exemption from well-established jurisprudential tradeoffs.

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if they fail to write a claim.175 In other words, we can use the stick of invalidity rather than the carrot of granting broader-than-optimal scope to achieve the policy goal of providing long-run incentives for claim drafting.

In a certain sense this is correct, but in practical terms the stick approach is not very feasible. We can ensure that patentees write a claim with the threat of invalidating a patent if they do not. But we cannot ensure that patentees write a precise claim.176

By “precision” here, I do not mean whether the patentee writes a claim that matches the optimal scope of the patent (I use the label “accuracy” for that question). 177 I mean that we want patentees to write claims that actually tell us something, i.e. that the claim text should have some information content and actually take a meaningful position on patent scope that a decision-maker can evaluate. A counterexample is a patentee who writes a claim that says “I claim the real invention disclosed in my patent.” This is a completely accurate claim—it literally describes the real invention and is not overbroad—but the claim is very imprecise. The claim is imprecise because it has no information content; it does not actually take a meaningful position on patent scope, and it is therefore useless in providing a baseline for courts to engage in ex post adjustment.

The threat of invalidity is a blunt instrument to ensure precision in patent claiming. Even if we can use invalidity to punish an utterly and transparently information-empty claim like the one above, 178 it is impossible in practice to finely calibrate a regime of invalidity to deter patentees from using terms such as “approximately” or “near,” which are not utterly empty but which are still rather vague.179 Invalidation is an on-off switch—one cannot partially invalidate a claim—and so it is difficult to adjust incentives to correspond to different degrees of drafting precision. In contrast, the amount of weight to be given to claim text vis-à-vis external evidence is more flexible, and is a better instrument for this purpose.

175 See 35 U.S.C. § 112 ¶ 2 (requiring patentees to write at least one claim);

35 U.S.C. § 282(3)(A) (providing a defense of invalidity for violation of § 112). 176 See Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 1364,

1374 (Fed. Cir. 2011) (a patentee violates § 112 ¶ 2 only if the claim language is “insolubly ambiguous”).

177 See supra text accompanying notes 133–138. 178 Intermountain Research & Eng’g Co. v. Hercules Inc., 163 U.S.P.Q.

(BNA) 390, 393 n.2 (C.D. Cal. 1969) (holding an “omnibus” claim of the nature described to be prohibited).

179 See, e.g., Young v. Lumenis, Inc., 492 F.3d 1336, 1346 (Fed. Cir. 2007) (claim with the term “near” is not indefinite).

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The bottom line is that the patent system has a long-run policy interest in incentivizing patentees to write not only a claim, but to write precise claims that actually convey information. And this conflicts with the interest in getting to the optimal patent scope in an individual case. The more weight that a court gives to external evidence, the less precise claims will be over the long run, and the less information they will convey. Conversely, the more weight that a court gives to claim text, the more biased the outcome will be in the individual case, but claims in the long run will be written more precisely. A court that wished to pursue the most efficient course overall should balance these competing considerations.

In practical terms, the court should allow some external evidence to be considered, and it should curb the more egregious instances of patentee overclaiming by either invalidating the claim or by creatively construing it down. But it should also give claim text primary weight in the interpretative calculus, such that the court will abide by the claim text even if, as a matter of totality-of-circumstances evaluation, it would find the ideal scope of the patent to be somewhat narrower than indicated. The amount of overbreadth that patentees are permitted is effectively the “bribe” that courts give to patentees as an incentive to write precise claims.180

As Part IV.A will explain, the balancing act I have described is in fact basically what courts do already, though the equilibrium has occurred more as a matter of accident than conscious design. That is, as the next Part will discuss, the Federal Circuit is presently comprised of a camp of textualist judges who give a relatively high amount of weight to claim text, and a camp of non-textualist judges who more closely follow an equal-weight-to-all-evidence approach.181 The position of the court as a whole therefore works out to be a reasonable approximation of the correct balance. But the fact that this balance occurs through the averaging of a methodological war between an extremist textualist camp and an extremist non-textualist camp,

180 It is worth noting that this analysis also applies to invalidity for

overbreadth as well as claim construction. If courts invalidated a claim whenever they thought it was even the slightest bit broader than the optimal scope of the patent, then patentees would again have no incentive to write claims. Thus, my theory says that courts should hesitate somewhat before invalidating claims, though they should also invalidate clearly overbroad claims. Consistent with my theory, this is exactly what courts do in practice. Microsoft Corp. v. i4i Ltd. Partnership, 131 S. Ct. 2238 (2011) (reaffirming that courts should give a presumption of validity to all issued claims). This Article focuses on claim construction because it has been the focus of the literature.

181 See infra text accompanying notes 214–225.

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rather than a unified approach where everyone is on the same page about the need for balance, also means there is a lot of extra legal uncertainty (over and above the efficient uncertainty of a balancing act) due to the doctrinal conflict.

It should also be noted I am not saying that current practice strikes the perfect balance, but only that it strikes a reasonable one. Perfectly calculating the truly optimal tradeoff between short-run accuracy and long-run incentives—i.e. the optimal bribe to patentees—would involve the same kind of information difficulty that we have already seen in attempts to directly calculate the optimal patent scope. For this reason, I cannot affirmatively state what the optimal bribe is. I only know that the critics’ position—zero—is clearly wrong.

IV. ADDRESSING THE INDETERMINACY OBJECTION To those who are familiar with the patent literature, the first

reaction to my argument that claims provide information to courts and reduce long-run information costs may be incredulity or outright laughter. After all, claim construction disputes are extremely common, and courts disagree all the time about what a particular claim means in terms of whether a particular product infringes a particular patent.182 If courts profess to find claims difficult to understand and construe, then how can claims be conveying information to those very same courts?

A more refined way of articulating the objection is that claim text is intrinsically meaningless.183 This argument, often associated with the Critical Legal Studies school, posits that all text is indeterminate and that courts must make decisions based on other sources and other considerations.184 This stridently anti-textualist position is decidedly

182 See supra note 38 and accompanying text. 183 By “intrinsic,” I am referring to whether text itself can communicate

information to a reader, without resort to external sources of evidence. The debate is often framed in terms of whether text has a “plain” or “ordinary” meaning. See, e.g., Burk & Lemley, supra note 75, at 30 (arguing that there is simply “no such thing” as an ordinary meaning to claim text); Dan Burk, Dynamic Claim Interpretation, in INTELLECTUAL PROPERTY AND THE COMMON LAW (Shyam Balganesh, ed., forthcoming 2012), available online at http://ssrn.com/abstract=2005251 (manuscript at 7–9) (arguing that “plain meaning is not so plain”).

184 See, e.g., William N. Eskridge, Jr. & Philip P. Frickey, Statutory Interpretation as Practical Reasoning, 42 Stan. L. Rev. 321, 341 (1990) (“Textualism can control statutory interpretation only if the text itself offers a complete and reasonably determinate source of meaning. This proposition has long been contested, and it is more controversial than ever today.”). The most famous judicial exposition of this view is Pacific Gas & Electric Co. v.

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out-of-fashion in most areas of law today, where even the most fervent anti-textualist of yesteryear now professes fidelity to text (which necessarily implies that text has some information content). 185 But anti-textualism is all the rage in the patent literature. Within the patent academy, it is routine to hear that frequent claim construction disputes prove that claim text has no intrinsic meaning—or, what is ultimately the same thing, that it has no information content without resort to external evidence.186

The belief that frequent claim construction disputes prove the intrinsic meaninglessness of claim text is a key part of the critics’ argument. 187 If text had no intrinsic meaning—i.e. no information content without resort to external evidence—then it logically follows that courts must necessarily resort to external evidence to decide cases.188 The major premise of the argument, however, is that frequent disputes among judges about how to apply claim text in making legal decisions prove the intrinsic meaninglessness of text.189 This premise is often only implicitly stated by the critics, but it is essential to their argument, and it is wrong. The remainder of this Part will explain.

G.W. Thomas Drayage & Rigging Co., 442 P.2d 641, 643–44 (Cal. 1968) (arguing against “a primitive faith in the inherent potency and inherent meaning of words”)

185 Compare Eskridge & Frickey, supra note 184, at 341 with William N. Eskridge, Jr., All About Words: Early Understandings of the “Judicial Power” in Statutory Interpretation, 1776-1806, 101 Colum. L. Rev. 990, 1090 (2001) (“[T]he proposition that statutory text ought to be the primary source of statutory meaning needs little defense today. We are all textualists.”); compare also Pacific Gas, 442 P.2d at 643–44 with ACL Techs., Inc. v. Northbrook Property & Casualty Ins. Co., 22 Cal. Rptr. 2d 206, 219 (Cal. App. 1993) (dismissing Pacific Gas as “linguistic nihilism” and “deconstructionist dictum”).

186 See, e.g., Burk & Lemley, supra note 75, at 30 (arguing that there is simply “no such thing” as an ordinary meaning to claim text); Burk, supra note 183, at 7–9 (same); Lee, supra note 7, at 114 (arguing against a view that “presumes that language is determinate”); Liivak, supra note 3, at 40 ( “Claim interpretation is now a meaningless exercise.”); see also Autogiro Co. v. United States, 384 F.2d 391, 396 (Ct. Cl. 1967) (“Claims cannot be clear and unambiguous on their face.”).

187 See, e.g., Burk & Lemley, supra note 3, at 1744 (arguing that claim text “isn’t working” because “courts seem unable to agree on what particular patent claims mean”); Liivak, supra note 3, at 37 (same);

188 See Lee, supra note 7, at 114 (arguing that “courts are justified in relying on normative principles to fill the void”).

189 Thomas Chen, Note, Patent Claim Construction: An Appeal for Chevron Deference, 94 Va. L. Rev. 1165, 1178–80 (2008) (arguing that judicial conflict demonstrates “as a matter of logic” that claims have no true meaning).

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A. The Circular Nature of the Argument. A rare example of someone stating the premise of the argument

explicitly is Dan Burk. According to Burk: This [high reversal rate] belies the certainty of plain meaning rules. It is surely not the case that the trial judge cannot read the text, or lacks access to a dictionary. If this were all that were required to reach the plain, ordinary meaning of claims, then one might expect trial court claim construction to be upheld with the same frequency that they are in fact overruled. What is clear is that plain meaning is not so plain.190

As stated above, Burk is far from alone, though he is the most explicit about his argument. And, at first blush, the argument is quite compelling. If a district judge, following the textualist methodology, reaches conclusion X, while an appellate judge following the same textualist methodology reaches conclusion Y, then either one of the judges has misapplied the methodology, or the methodology is indeterminate. Given that the textualist methodology is supposed to be easy to apply, it is unlikely that a judge would accidentally misapply the methodology very frequently. This seemingly leads to the conclusion that the frequent disagreement among judges proves textualism is indeterminate.

But Burk’s argument has a crucial assumption: it would be true only if the appellate and district judges were both actually trying to apply the same textualist methodology. There is no good evidence to justify this assumption, and much evidence to contradict it. To state my argument simply, the reason for frequent claim construction disputes is that some judges are not following the plain meaning, not because the plain meaning is indeterminate.

How do critics like Burk know that all the patent judges are really trying to follow the textualist methodology? Because the judges say so.191 But such self-serving statements are unreliable.192 Textualism is in the political vogue right now, and every judicial nominee must take a figurative blood oath before the Senate to practice it, so there is a strong incentive for judges to pretend to be following plain text even

190 Burk, supra note 183, at 9. 191 See, e.g., Burk & Lemley, supra note 3, at 1744 & nn. 5–9 (citing cases

that purport to be textual disagreements about “‘a,’ ‘or,’ ‘to,’ ‘including,’ and ‘through’”).

192 See Richard A. Posner, Realism About Judges, 105 Nw. U. L. Rev. 577, 582 (2011) (“there is no recognized duty of candor in judicial opinion writing”).

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when it is not true.193 The critics’ faith in judicial candor is particularly ironic given that their normative proposal is that judges should cynically twist text to reach outcomes that are really motivated by other considerations. 194 Somehow they assume that no judge is surreptitiously doing exactly what they propose already.

When we look at what patent judges do, rather than merely what they say, it becomes quite obvious that the consideration of external evidence during claim construction—and hence departure from plain textual meaning—is pervasive and routine. The Federal Circuit holds that the specification must always be considered during claim construction, 195 even while it says that courts should not “import” elements from the specification into the claim.196 The Federal Circuit mandates that expert testimony be provided in virtually all patent cases.197 Finally, the Federal Circuit refuses to hear claim construction appeals unless there is a complete record of external evidence including testimony about the physical accused product. 198 If claim construction was actually being carried out as a purely textual exercise—in Burk’s parlance, of reading the claim text and looking up a dictionary—then the Federal Circuit’s practice would be inexplicable. The most natural way to understand the practice of requiring so much

193 Id. at 583 (“Judges have political reasons to represent creativity as

continuity and innovation as constraint.”); Robert Alleman & Jason Mazzone, The Case for Returning Politicians to the Supreme Court, 61 Hastings L.J. 1353, 1376-77 (2010) (“nominees now present themselves as the law’s servants, robotically applying legal rules to the case at hand”).

194Another irony is that the critics are hard-nosed cynics when it comes to patentee self-serving statements. See supra Part I.C. But somehow they become wide-eyed idealists when it comes to judges. Cf. Richard A. Posner, What do Judges Maximize? (The Same Thing Everybody Else Does), 3 Sup. Ct. Econ. Rev. 1 (1993).

195 Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996) (“the specification is always highly relevant to the claim construction analysis”).

196 CollegeNet, Inc. v. ApplyYourself, Inc., 418 F.3d 1225, 1231 (Fed. Cir. 2005) (“In examining the specification for proper context, however, this court will not at any time import limitations from the specification into the claims.”). See Merges & Duffy, supra note 3, at 820 (stating that these two rules “fundamentally contradict each other”)

197 Centricut, LLC v. Esab Group., Inc., 390 F.3d 1361, 1369–70 (Fed. Cir. 2004) (requiring expert testimony in all cases involving complex technology).

198 Jang v. Boston Scientific Corp., 532 F.3d 1330, 1337-38 (Fed. Cir. 2008) (“Without knowledge of the accused products, this court cannot assess the accuracy of the infringement judgment under review and lacks a proper context for an accurate claim construction.” (quoting Lava Trading, Inc. v. Sonic Trading Mgmt., LLC, 445 F.3d 1348, 1350 (Fed. Cir. 2006))).

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external evidence to be provided is that the judges—or at least some of them—use it.199

Moreover, even with the obvious incentives for judicial dishonesty, some Federal Circuit judges have openly admitted that they do not follow claim text, but rather cynically manipulate such text to reach predetermined outcomes based on external evidence. As statements against self-interest, such admissions are much more reliable. 200 Federal Circuit Judge Alan Lourie’s dissenting opinion in Arlington Indus., Inc. v. Bridgeport Fittings, Inc. 201 provides an excellent example:

[I]n construing the claims we should avail ourselves of the knowledge we glean from the patent specification to see what the inventors disclosed as their invention. The bottom line of claim construction should be that the claims should not mean more than what the specification indicates, in one way or another, the inventors invented.202

Thus, Judge Lourie first looks to “the patent specification to see what the inventors disclosed as their invention,” and the claim will then be creatively construed so that it does not “mean more than what the specification indicates, in one way or another, the inventors invented.” The claim text itself never enters the equation. This seems a perfect reflection of the critics’ proposed methodology. And, as previously described in Part I.C.6., Judge S. Jay Plager has made a very similar argument as well.203

The icing on the cake here is that Dan Burk has himself recognized that judges in fact routinely depart from the textualist methodology. In one passage of his article with Mark Lemley, they state that “courts, as a practical matter, aren't paying peripheral claim construction [i.e. claim text] more than lip service.”204 They then cursorily state that this

199 See Jeffrey A. Lefstin, Claim Construction, Appeal, and the

Predictability of Interpretative Regimes, 61 U. Miami L. Rev. 1033, 1054 (2007) (“regardless of [ ] the black-letter law . . . , it is reasonable to expect that judges will test the validity of their interpretations by considering what outcomes follow”).

200 Cf. Fed. R. Evid. 804(b)(3) (recognizing that statements against interest are generally considered reliable).

201 632 F.3d 1246 (Fed. Cir. 2011). 202 Id. at 1258 (Lourie, J., dissenting). 203 Retractable Techs., Inc. v. Becton, Dickinson & Co., 653 F.3d 1296,

1311 (Fed. Cir. 2011) (Plager, J., concurring). 204 Burk & Lemley, supra note 3, at 1783.

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observation helps their argument.205 But in fact it undermines it. Burk and Lemley argue—like all of the critics206—that the status quo has serious uncertainty problems and the blame lies with textualism.207 But if courts are not actually practicing textualism, then one cannot blame textualism for the status quo. In short, without the assumption that existing patent judges are all faithful textualists, the critics’ entire argument falls apart.

More deeply, Burk’s error is one that constitutional law scholars have exposed using what is known as the “interpretation-construction distinction.”208 To understand the logical fallacy involved, it is first helpful to consider an example from outside of patent law. Consider the first word of the First Amendment to the United States Constitution: “Congress.” As a matter of intrinsic linguistic meaning, the word cannot be clearer: it refers to the legislative organ of federal government.209

But, as almost every lawyer knows, the legal scope of the First Amendment is much broader, and its actual boundaries are rather nebulous.210 The First Amendment has been broadly construed to cover all manner of state government action, executive action, and judicial action;211 none of which are the actions of the legislative branch of the federal government.

What critics like Burk do is conflate these two entirely different concepts of meaning. Under Burk’s logic, the fact that judges can disagree about what “Congress” means as a legal matter—i.e. that they can disagree about the scope of the First Amendment—proves that the word “Congress” is linguistically indeterminate. But it proves no such

205 Id. 206 See, e.g., Cotropia, supra note 3, at 1913; Liivak, supra note 3, at 37. 207 Burk & Lemley, supra note 3, at 1744–65 (stating that claim

construction “isn’t working”); id. at 1791 (arguing that claim text has “failed catastrophically”).

208 See generally Lawrence B. Solum, The Interpretation-Construction Distinction, 27 Const. Comment. 95 (2010) (describing the difference between interpreting linguistic meaning and construing legal effect). Somewhat ironically, an important contributor to this distinction is Arthur Corbin. See 5 Corbin on Contracts § 24.3 (describing the distinction in contract law).

209 See generally Mark P. Denbeaux, The First Word of the First Amendment, 80 Nw. U. L. Rev. 1156 (1986).

210 Compare Marsh v. Alabama, 326 U.S. 501 (1946) (holding First Amendment applied to privately owned company town) with Lloyd Corp. v. Tanner, 407 U.S. 551 (1972) (holding that First Amendment does not apply to privately owned shopping mall).

211 See, e.g., New York Times Co. v. Sullivan, 376 U.S. 254 (1964) (applying the First Amendment to state common law libel).

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thing. The fact that judges can creatively twist the word “Congress” to cover all government as a matter of legal precedent does not prove that the word is intrinsically meaningless as a textual matter. All it proves is that judges have lots of power in setting legal precedent. It is a mistake to conflate judge-controlled legal meaning with intrinsic linguistic meaning.

This logical fallacy is deeply pernicious for patent law because it results in a vicious cycle. If we have some judges who are surreptitiously following the critics proposal—i.e. to first look for the real invention using extrinsic evidence and then creatively construing the claim text to conform—then these judges are going to render claim “constructions” that are distinctly implausible as a matter of ordinary language. They will creatively construe claim terms like “screw” (to use Burk and Lemley’s example) to cover only wooden screws, or alternatively to cover every fastening device, depending on what the external evidence indicates the real invention to be. 212 Critics like Burk and Lemley then swoop in and argue that these judicial decisions show the word “screw” to be intrinsically meaningless.213 From this predicate, a critic then argues that courts should interpret words like “screw” according to the real invention.214 Their judicial allies then take this as encouragement to engage in even more creative twisting of claim text, which generates even more legal uncertainty, which prompts even more academic criticism of claim text, and so on ad infinitum. A better example of circular bootstrapping cannot be found.

This vicious cycle is exactly what has happened in patent law. A good example is the outcome in Retractable Techs., Inc. v. Becton, Dickinson & Co., 215 the case in which Judge Plager wrote his concurring opinion. The ultimate holding of the case was that a claim to a syringe with a “body” would cover only syringes using a single-piece body, and did not cover a later two-piece syringe. As the majority opinion (by Judge Lourie) conceded, a purely textual analysis of the word “body” would suggest that it covers both one-piece and multiple-

212 Burk & Lemley, supra note 75, at 37 (using the word “screw” as an

example of indeterminacy). 213 Id. I do not mean to single out Burk and Lemley. This fallacy is

extremely common. Another example is Peter Lee, who argues that because “traditional claim construction”—i.e. doctrine—is indeterminate, courts must necessarily look beyond claim text. Lee, supra note 7, at 113. Once we separate legal meaning from intrinsic meaning, the logical error is plain.

214 Burk & Lemley, supra note 75, at 52–54 (arguing that there is no such thing as plain meaning and courts should instead engage in a policy analysis of ideal patent scope); Lee, supra note 7, at 113.

215 653 F.3d 1296 (Fed. Cir. 2011).

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piece structures. 216 The court adopted the narrower construction, however, because the majority believed that a single-piece syringe was more reflective of “the scope of the actual invention.”217 In other words, the majority construed the word “body” in a way that departed from its plain meaning. They did this not because they could not determine what the plain meaning was, but because the majority gave preference to the external-evidence-determined result.

The majority’s decision then prompted a furious dissent by Chief Judge Rader, who argued that the plain meaning of “body” ought to be followed. 218 In this way, Retractable demonstrates how legal uncertainty can arise even in the absence of any linguistic indeterminacy. Retractable contains legal uncertainty for two reasons. First, the majority’s look-for-the-real-invention methodology is inherently uncertain, because nobody knows ahead of time what level of abstraction a particular judge will find to be the real invention, and different judges may well have very different intuitions on how much patent scope is optimal in a particular case. 219 Second, and more importantly, the majority creates a methodological conflict with more textualist-oriented judges,220 and nobody knows ahead of time whether they will get an appellate panel comprised of textualist judges or non-textualist judges.221 And, going forward, Retractable stands as a citable precedent for the proposition that external evidence is an acceptable interpretative methodology; which will cause even more methodological conflict and legal uncertainty in the future, perpetuating the vicious cycle.

Retractable is hardly an isolated case in proving that the cause of judicial disagreement over claim construction is conflict over doctrinal

216 Id. at 1305 (conceding that the claim text itself would “imply that a

‘body’ is not limited to a one-piece structure,” but holding that “the claim construction process entails more than viewing the claim language in isolation”).

217 Id. 218 Id. at 1311–12 (Rader, C.J., dissenting). 219 Royal Typewriter Co. v. Remington Rand, Inc., 168 F.2d 691, 693–94

(2d Cir. 1948) (Hand, J.) (“courts have differed, and always will differ, as to the allowable latitude in a given instance”).

220 See Retractable Tech., Inc. v. Becton, Dickinson & Co., 659 F.3d 1369, 1373 (Fed. Cir. 2011) (Moore, J., dissenting from denial of en banc rehearing) (criticizing “the majority’s attempt to rewrite the claims to better conform to what it discerns is the ‘invention’ of the patent”).

221 See R. Polk Wagner & Lee Petherbridge, Is the Federal Circuit Succeeding? An Empirical Assessment of Judicial Performance, 152 U. Pa. L. Rev. 1105, 1161-63 (2004) (finding that claim construction decisions are panel dependant).

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methodology, not the intrinsic meaning of claim text.222 Consider the granddaddy of all modern claim construction cases, Phillips v. AWH Corp. 223 In Phillips, the majority, citing a stipulated dictionary definition, construed the word “baffle” to cover all objects that “check, impede, or obstruct the flow of something.”224 Judge Lourie, this time in dissent, argued that “baffles” should cover only “bullet deflecting baffles,” because that was how the specification described the purpose of the invention.225 Once again, the disagreement and uncertainty is purely about legal methodology. Everyone knew what “baffle” meant as a textual matter. Indeed, it was so clear that the parties stipulated to it.226 The question was only whether the textual meaning would govern as a legal matter. And the fact that judges disagree about legal methodology cannot properly be invoked as proof that a particular side in the debate (i.e. the look-for-the-real-invention side) is correct.

At this point, a countervailing concern might be that I have undermined my own theory: if courts are already in fact practicing a creative construction methodology at least some of the time, then shouldn’t that undermine the incentive for drafting and destroy the information value of claims? And if those consequences have not occurred, then isn’t my theory wrong? The answer this concern is found in Part III. I do not argue that courts must never consider external evidence, nor that they cannot ever engage in creative construction.227 My argument is that they cannot give external evidence too much weight and cannot engage in creative claim construction too often, and certainly not with the weight and frequency that critics of claims would like. The fact that courts sometimes engage in creative construction now is in fact predicted by my theory, because ultimately courts should balance the long run savings in information costs against the short-run inaccuracy costs of enforcing slanted text. The right outcome under this approach is not to mechanically abide by claim text in every case; but neither is it to give no weight to claim text whatsoever. What courts do today is a reasonable approximation of the right balance.

222 Retractable, 659 F.3d at 1373 (Moore, J., dissenting from denial of en

banc rehearing) (arguing that Retractable “illustrates a fundamental split within the court as to . . . the proper approach to claim interpretation”).

223 415 F.3d 1303 (Fed. Cir. 2005) (en banc). 224 Id. at 1324. 225 Id. at 1329 (Lourie, J., dissenting). 226 Id. at 1324 (noting that the parties had stipulated on what the

dictionary definition of “baffle” was). 227 See Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S.

722, 732 (2002) (“the clearest rule of patent interpretation, literalism, may conserve judicial resources but is not necessarily the most efficient rule”).

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This observation leads to a second potential concern: If courts are striking roughly the right balance under my theory, then why is claim construction so grossly uncertain? In other words, if Burk and Lemley cannot properly blame textualism for the uncertainty problems of the status quo because courts are not actually practicing textualism, then can’t they at least blame my theory, given that I am arguing that courts in fact practice the kind of balancing that my theory prescribes?

It is true that some amount of uncertainty is predicted by my theory, and to that extent the counterargument would be on target.228 But the present degree of uncertainty in claim construction doctrine is far more than what my theory would find efficient. The reason is because the pervasive methodological conflict that we have witnessed between Judges Rader and Lourie (and their respective fellow travelers) is wholly wasteful from the perspective of achieving an efficient balance between long run and short run considerations. As a matter of first principles, we can achieve a proper balance between long-run incentives and short-run accuracy in two ways: We can have all the judges agree on the need for balance and agree on the relative weight to be given to claim text vis-à-vis external evidence; or we can have a methodological war between textualist judges and non-textualist judges, with each camp sticking to their own preferred methodology in their own particular cases,229 and the overall average working out to be something that is about right. It should be quite evident that the latter approach will create a lot more doctrinal conflict and legal uncertainty than the former approach. And the latter approach is exactly what has been happening in the Federal Circuit.230 In this sense, the courts are currently striking approximately the right balance under my theory, but they are doing it in the worst way possible. The extra uncertainty caused by this methodological conflict is not something that can be properly attributed to my theory.

To summarize the main point of this Part, the response to the objection that claims cannot convey information to judges because text is intrinsically meaningless is that the cited evidence does not support the argument. The cited evidence—conflict among judges—proves very little beyond the fact that judges have a lot of power follow different

228 See supra text accompanying notes 173–174. 229 Wagner & Petherbridge, supra note 221, at 1161–63 (finding that the

interpretative methodology used depends on the identity of the judge). 230 See Retractable Tech., Inc. v. Becton, Dickinson & Co., 659 F.3d 1369,

1373 (Fed. Cir. 2011) (Moore, J., dissenting from denial of en banc rehearing) (observing that there is a “fundamental split within the court”); Merges & Duffy, supra note 3, at 820 (arguing that that the two doctrinal rules pertaining to the specification’s role in claim construction “fundamentally contradict each other”).

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interpretative methodologies in practice, notwithstanding the shared rhetoric of textualism. And this refutation of the indeterminacy thesis comports with the wider literature beyond patent law. The argument that text is intrinsically meaningless has been made in virtually every area of law—it is a staple of the Critical Legal Studies school—but has largely fallen by the wayside.231 Few people today subscribe to the position that the text of the Constitution, statutes, contracts, or wills are utterly and intrinsically meaningless;232 yet this is what passes for conventional wisdom in patent law. The argument is ultimately no better founded in patent law than anywhere else.

B. Under-determinacy Versus Indeterminacy. A second response to the indeterminacy objection is that there is an

important difference between saying that claim text is indeterminate and saying that it is under-determinate. Judicial conflict and disagreement can at most prove that claim text is under-determinate, not that it is indeterminate.

Some definitions are helpful here. A text has a fully determinate linguistic meaning if it specifies a single right answer in every factual situation (which, for purposes of my analysis here, I will assume that judges actually follow). A text is indeterminate and intrinsically meaningless if it specifies no right answer in any factual situation. Finally, a text is under-determinate if it specifies a right answer in some factual situations.

The notice theory posits that claim text is fully determinate.233 In this respect, the critics are right that it is too ambitious. Few if any texts are fully determinate, because it is difficult to craft textual rules that prescribe an answer for every factual situation that might arise. To take H.L.A. Hart’s famous example, even a garden variety rule such as “no vehicles in the park” is not fully determinate, because there is some vagueness about what constitutes a “vehicle” in terms of whether it covers bicycles.234 In similar fashion, a patent claim to a new type of “vehicle” will contain the same vagueness about its scope.

231 See Jonathan T. Molot, The Rise and Fall of Textualism, 106 Colum. L.

Rev. 1, 59 (2006) (“In each area, the revolution is over, disagreement is confined, scholarly discourse is more productive, and the law is better off as a result.”).

232 Id. 233 Merrill v. Yeomans, 94 U.S. 568, 573 (1876) (“no excuse” for uncertainty

in claim language). 234 H.L.A. Hart, Positivism and the Separation of Law and Morals, 71 Harv.

L. Rev. 593, 607 (1958).

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But saying that a text is not fully determinate does not imply that the text is therefore indeterminate. The word “vehicle” does not prescribe a right answer in the case of a bicycle. But an automobile is clearly a vehicle and therefore violates the rule, while a pedestrian clearly is not a vehicle and does not violate the rule. 235 A textual command such as “no vehicles in the park” is therefore under-determinate. This under-determinacy will cause uncertainty and judicial disagreement, because even judges who faithfully attempt to follow text will disagree about whether a cyclist is guilty of violating the prohibition,236 and such hard cases will disproportionately emerge in litigation due to selection effects. 237 The existence of frequent judicial disagreement and litigation uncertainty thus does not prove that a text is indeterminate. At most it proves that the text is under-determinate.

And if claim text is only under-determinate rather than indeterminate, then the critics’ argument falls apart. Saying that a text is under-determinate is the same as saying that a text is imperfect, but it is a mistake to say that “imperfect” means “catastrophically bad,” 238 or to make the perfect the enemy of the good. An under-determinate text still has social value, because it specifies an answer in some situations and provides some amount of information to courts. It is therefore not correct to say that the patent system’s reliance on claim text is explicable only as a cult-like devotion to mindless formalism.239 An under-determinate text that specifies some answers to some situations is still far better than an utterly indeterminate legal standard such as “substantial similarity,” or the de facto arbitrariness that will result from taking blind stabs in the dark on the ultimate question of optimal patent scope.

CONCLUSION This Article has made four contributions over the prior literature.

First, the Article has laid out the information theory of patent claims, 235 Id. 236 Id. 237 See generally George L. Priest & Benjamin Klein, The Selection of

Disputes for Litigation, 13 J. Legal Stud. 1 (1984). 238 Cf. Burk & Lemley, supra note 3, at 1791 (arguing that their proposal

cannot cause more uncertainty than using claim text, because claim text is already “catastrophically” indeterminate).

239 Cf. Liivak, supra note 3 (arguing that there is a “cult of the claim”); Lee, supra note 110, at 31; Burk & Lemley, supra note 111, at 1672. The argument is also wrong to the extent that it implicitly assumes that Federal Circuit judges are all actually practicing formalist methods. See supra Part IV.A; Tun-Jen Chiang, Formalism, Realism, and Patent Scope, 1 IP Theory 88 (2010).

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and has shown that this theory is a better fit with the real-life patent system than the traditional notice theory. As the critics have correctly noted, the notice theory cannot explain many important features of modern claiming such as requiring claims to be drafted by obviously-biased patentees, and allowing a delay between the drafting of the claim and the judicial determination of patent validity and scope. The disconnect between theory and reality then leads the notice theory towards empirical failure, a failure that the prior literature has fully demonstrated.

The information theory overcomes these defects of the notice theory. The function of claims is not to provide perfect delineations of the optimal patent scope, but to force patentees to partially disclose their superior information on that question in order to achieve imperfect approximations of that ideal. Under this paradigm, the existing features of the patent system make sense, because requiring patentees to draft claims is a method of information forcing, but the information disclosed is imperfect and biased. Delaying the ultimate adjudication of patent validity and scope to the later time of litigation is an efficient mechanism to allow courts to mitigate some of the imperfection caused by patentee drafting bias. Explaining these otherwise inexplicable features of the modern claiming is the first contribution of this Article.

The implication of this analysis is that claims have social value in giving courts an imperfect-but-reasonable approximation of the correct scope of the patent at low information cost. This value is more evident once we compare it to the alternative, which is that courts will take uninformed stabs in the dark on ideal patent scope using external evidence. Such a procedure is destined to fail, because the entire premise of having a patent system at all is that the government (including courts) cannot directly and reliably calculate the correct reward for an inventor. Claims therefore do not detract from a determination of the ideal monopoly reward, but instead help provide reasonable approximations of it. And if claims are not harmful but are instead helpful, then they should not be abolished. The second contribution of this Article is therefore to refute the Burk and Lemley proposal to abolish claims and the more widely-shared underlying intuition (that claims detract from the real invention) that supports it.

Once we recognize that claims have social value, then it also emerges that they cannot be treated with indifference by courts in the determination of patent scope. If courts simply gave the same weight to claim text as to all other evidence, then patentees would have no incentive to draft claims. Thus, not only must claims not be abolished, they also should not be merely given equal weight to external evidence, as the holistic methodology of the other critics would suggest. Rather, courts should give special weight to claim text in determining patent

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scope in order to provide an incentive for claim drafting, though at the same time it should also consider external evidence to a limited extent in order to mitigate the imperfection of claim text and to achieve more accurate outcomes in individual cases. This normative prescription is the third contribution of this Article.

Finally, as Part IV has demonstrated, the current overall practice of courts is consistent with my normative prescription. If we look at what the judges do, rather than merely what they say, then it becomes clear that the Federal Circuit is not comprised of mindless textualists as the critics imagine. Rather, the court in practice oscillates between decisions that give determinative weight to claim text and plain meaning, and decisions that give a greater role to external evidence. This is largely consistent with my normative prescription, and it shows that the information theory is a useful positive theory in addition to a normative one, and providing a positive theory of claim construction is the fourth contribution of this Article.

Although Federal Circuit currently achieves an interpretative balance, as predicted by my theory, there is still room to improve. The Federal Circuit achieves interpretative balance through a methodological war between two extreme camps of judges, with each camp applying its own methodology in individual cases, rather than having all the judges apply the same balancing methodology. The result for the court is balanced overall, but the methodological war causes large variation in outcomes across individual cases and causes unnecessary legal uncertainty. Efforts at reforming claim construction and harmonizing doctrine therefore can be productive. But the predicate of such productive reform is to understand the true value of patent claims rather than arguing that they are worthless self-serving statements that detract from the real invention.