Semiconductor protection proves sui generis is effective <and resolves the innovation net benefit> - it’s subject to a four-prong test that guarantees solvency

THE SCPA WAS NECESSARY TO BRIDGE THE “PROGRESS GAP” CREATED BY RAMPANT CHIP PIRACY AND THE POOR FIT OF SEMICONDUCTORS WITHIN EXISTING STATUTORY FRAMEWORK

Any proposed sui generis intellectual property legislation should be properly vetted to ensure that the exclusive rights granted do in fact meet the constitutional mandate of providing “exclusive rights for limited times to promote the Progress of Science and the useful Arts.”151 It is not enough to establish that a certain type of intellectual property fails to qualify for either copyright or patent protection.152 The proposed legislation must create an incentive to innovate while simultaneously enriching the public domain, without disrupting existing intellectual property law.153

Although early semiconductor chip devices clearly fell into the “gap” between federal patent and copyright law, Congress could not stop here. It had to further evaluate the semiconductor industry to establish that there was something unique or special about this industry that warranted additional stand-alone or sui generis legislation to promote “Progress of . . . the useful Arts.”154 I refer to these special gaps as “progress gaps” since the bridging of these gaps is essential to continued innovation and progress.

Professor Pamela Samuelson, who has done extensive research on the SCPA, does not expressly use the term “progress gap” in her analysis of why the statute was both timely and necessary. She does, however, argue that what made the gap in semiconductor chip protection “special” and worthy of sui generis intellectual property legislation was the following: (1) the chip industry’s centrality to continued economic growth in the United States; (2) the great disparity between chip research and development cost; and (3) the cost to copy chip designs, which was allowing copycats to undersell chip innovators.155 The SCPA bridged the existing gap and promoted progress by providing a set of exclusive rights that also stimulated innovation of chip designs. Limitations on these rights, such as the reverseengineering provision, ensured continued access to these designs for downstream product development.156

As explained previously, Robert W. Kastenmeier157 and Michael J. Remington158 provided a four-part procedural framework for vetting proposed sui generis intellectual property legislation to ensure that it is in fact consistent with existing law and promotes progress by maintaining the mandated constitutional balance between access and innovation.159 They argue that this four-prong test was implicitly applied during the congressional hearings surrounding the enactment of the SCPA and should be the test used for future proposals, including changes to patent law.160

The K-R test consists of the following four parts: (1) does the interest fit within the existing legal framework/principles without degrading existing law, (2) does the proposed statute contain reasonably clear and satisfactory definitions, (3) does the proposed legislation pass honest cost/benefits analysis, and (4) will the proposed statute enrich or enhance the aggregate public domain? The SCPA met all four prongs of the K-R test.161