Author: Deepa Varadarajan
Abstract: Can intellectual property (IP) rights be lost? Much attention has been paid to how IP rights are acquired and whether threshold requirements are too laxed or onerous. But surprisingly little attention has been paid to the question of IP forfeiture. That is, once IP rights are acquired, what—if anything—do owners have to do to keep those rights or risk losing them forever. The answer, it turns out, varies widely across the IP landscape and has important consequences for follow-on innovation, competition, and the public domain.
This Article takes the first close look at forfeiture mechanisms throughout the five major IP regimes—utility patent, trade secret, copyright, design patent, and trademark. I demonstrate that in several areas of IP, forfeiture mechanisms (e.g., maintenance fees, monitoring obligations, and use requirements) have weakened or narrowed over time. Building on prior scholarship, I also delineate the functions that these forfeiture mechanisms serve. Notably, they force IP owners to decide if the cost and effort of maintaining IP rights are worthwhile. In this way, forfeiture mechanisms help eliminate low value IP rights and enlarge the public domain, benefiting follow-on innovators and society at large. In addition, forfeiture mechanisms serve an important notice or signaling function by forcing owners to engage in acts that inform second comers about the existence and scope of IP rights. I argue that these functions are particularly important when it comes to functional or useful subject matter (e.g., innovations that make a product work). Given forfeiture’s role and its problematic narrowing across the IP landscape, I suggest the need for reform—particularly in design patent and copyright law, two areas that increasingly cover functional subject matter but lack any forfeiture mechanism.
Citation: Varadarajan, Deepa, Forfeiting IP (November 1, 2021). American Business Law Journal (forthcoming 2022) , Available at SSRN: https://ssrn.com/abstract=4032881
