Yesterday, the Federal Circuit heard argument on Smuckers' patent on its frozen crustless peanut butter and jelly sandwich, and of course the jokes are flying like a food fight. "A sticky case," concludes WSJ (subscription required), and in 2003 the Chicago Tribune published an extended and quite good analysis of the case.

To a non-patent-lawyer, it is not entirely clear just what part of the product is the focus of the patent. Some stories emphasize the crimped edge that keeps the contents safely confined and some point to the fact that peanut butter is applied both above and below the jelly, overlapping in each layer, and thus forms a seal that keeps the bread from getting soggy. In short, Smuckers has triumphantly met both the danger of the jelly leaking out the sides of the sandwich AND the soggy bread conundrum, but whether it claims one innovation or two is unclear.

Solving both problems is crucial, because the product is not consumed immediately upon preparation. It is prepackaged, frozen, and then thawed during a school-day morning in the lunch box. The product is also a hit, with $27.5 million in sales (wholesale) per year.

The judges were skeptical, and it appears unlikely that either the peanut butter cocoon or the crimped edge will survive the argument that prior art exists. (You know your argument is in trouble when a judge tells you that your patent duplicates something his wife has been doing for years.)

But part of the problem is that the USPTO and the courts have gotten themselves into a corner where they must document all prior art; an examiner cannot blow off the application on the ground "this is ridiculous" or "everybody knows this." As the Trib noted in connection with a patent on sideways swinging obtained by a 5-year-old (whose father happened to be a patent attorney), "The patent office is searching for documented proof that children have indeed always powered their swinging by pulling on chains. Then, and only then, will it kill the patent as quickly as possible." (Note: The re-examination order is dated 2002, and there is no further reference to the patent in the USPTO database, so such documentation seems not to have been forthcoming.)

Sideways swinging looks like a no-brainer. But the PB&J case is not as one-sided as it seems. The patent system is called upon to perform two inconsistent tasks: protect creativity and protect investment. Leaving aside the technicalities of patent law, the equitable essence of Smuckers' claim is that it made a significant investment to determine whether a market existed for this product. Had the answer been "no," the investment would have been lost.

Furthermore, the realities of the marketplace are that consumer goods companies introduce hundreds of products each year, most of which tank. If society wants to foster this stream of innovation, then it must find some way to reward people for taking the risk of determining whether the product will fly, even if the actual product does not seem terribly innovative.

Without such protection, the pressures for free-riding become over-whelming; every competitor will lie in the weeds, and then copy-cat the winners while avoiding the losers, but, in this as in so many situations, we cannot all of us free ride on all of us.
Furthermore, without patent protection, the logical end is that only the big players can be in the game because they are the only ones with the marketing clout and brand recognition to capitalize on unprotected innovations.

So, silly as the Smuckers' patent might seem, it represents a real issue, and not an easy one. If you look at the wonderful collection of goofiness at Totally Absurd, you laugh, but every once in while you think, "Y'know -- I wish I had one of those. I wonder if anyone actually sells it." And there is no chance that anyone will sell it if it could not be patented, and if they could not be protected in their faith that there are indeed enough goofs who might want to buy it.

UPGRADE (April 11, 10:00 a.m.): The court ruled against Smuckers two days after the argument.