Search the archive.

Of course, any emissions-abatement projection would be more complex than the elegant Moore’s law, because clean tech is a burgeoning collection of technologies and processes, each with its own physics, risks, and investment cycles. A workable equivalent for energy would have to predict innovation cycles and rates of abatement for the most important sectors—wind, concentrated solar power, biomass fuels, carbon capture, and clean coal, to name a few.

Still, it must and, we believe, can be done. Several cost/benefit analyses, such as the carbon-abatement cost curve popularized by McKinsey, offer comprehensive views of major technologies’ carbon-reducing capacities and thus seem like reasonable places to start. But they all suffer from two major shortcomings. They don’t project technology development into the future, and they largely fail to account for the time-to-market problem.

This contribution questions the term of protection for patents under circumstances of climate change. Patents typically last for 20 years but, for climate-related technologies, this is arguably too long. Under the 1.5°C scenario of the Paris Agreement, we need to make significant headway before 2030. Luckily, the technologies that need to be implemented broadly to reach the 2030 threshold have been developed already. To save civilisation from the worst impacts of climate change, the roll-out of existing technologies (static efficiency) is more important than the development of new ones (dynamic efficiency).

However, patent terms take neither static efficiency nor the climate timeframe into account. Technologies developed today will come off patent only in the 2040s, limiting their free availability when their wide roll-out should be the main concern. Conversely, the climate technologies that come off patent today were developed in the early 2000s, long before climate change acquired its current urgency and investment in climate technologies was ramped up.

The impact nonpracticing entities (NPEs), or “patent trolls,” have on innovation may be the most important empirical question in patent law today. So far, however, scholars have analyzed litigation brought by various types of patent owners in a fragmented and indirect fashion. Some scholars have studied only the most litigious or easily identifiable trolls.1 Such studies miss as much as 85% of NPE-asserted patents.2 Others have focused exclusively on litigation filed during a handful of years in the last decade.3 These studies fail to account for the vast differences among patents that happen to be litigated at the same time. It makes little sense, for example, to compare the first and only litigation of a one-year-old medical-device patent to the twentieth litigation of a nineteen-year-old software patent, even if both proceed contemporaneously.

Perhaps not surprisingly, these narrow studies have produced results at odds with one another. The empirical literature examining NPEs is, to put it mildly, internally inconsistent. Some studies strongly suggest that NPEs are every bit the tail that wags the dog. NPEs, for example, assert the lion’s share of “most-litigated” patents4 and are especially dominant in high-tech fields, where patents tend to be plentiful, cheap, and broad.5 Others report the exact opposite. Trolls really don’t exist at all,6 exist but are exceedingly rare,7 or exist in modest numbers but hold few of the traits attributed to them by their detractors.8

Unfortunately, regulatory monopolies often fail to harness the power of differential pricing. For instance, instead of differentially pricing patents, the PTO charges patent applicants and patentees uniform fees that do not depend on the underlying invention type.9 This is inefficient because, as has been shown empirically, inventors in different industries value patent rights differently,10 and the PTO’s cost of reviewing patent applications varies across these industries.11

This Article explains how the PTO could instead use its power as a regulatory monopoly to differentially price patents across industries. Using insights from both neoclassical and behavioral economics, the Article focuses on two primary ways in which this kind of pricing could enhance social welfare. First, differential pricing across industries, particularly with respect to patent maintenance fees, would increase PTO revenues.12 In particular, the PTO could increase maintenance fees on patentees in industries that, on average, care more about patent protection. An increase in these late-stage fees would enable the PTO to lower front-end patent application fees for everyone, thereby reducing the total cost of patenting for most applicants. Alternatively, the PTO could use the additional revenues to improve its application review process, such as by hiring additional examiners to expedite review. To the extent we believe heightened availability of patent protection or a more efficient patent review process leads to more inventive activity, differential patent pricing could promote innovation.13

The crux of this Article is the claim that inventions’ time-to-market strongly correlates with optimal patent strength. This claim has three components: First, the Article uses the framework provided by stand-alone models of innovation to show that inventions’ time-to-market bears a close relationship to the amount of patent protection needed to motivate their development. The optimal patent award for inventions is primarily a function of their R&D costs, the risk of failure in R&D, the anticipated future revenue streams from the projects if they succeed, and the potential for imitation by rivals.43 Inventions’ time-tomarket is a fairly reliable indicator of all four factors. Longer R&D times increase the costs of capital for an R&D investment while diminishing the value of future revenue streams because of discounting.44 They are also correlated with higher out-of-pocket R&D costs and greater technological uncertainty.45 Moreover, because imitators usually avoid much of the uncertainty involved in innovation, and because recent advances in reverse-engineering technology allow imitators to quickly copy most types of inventions (software being the main exception) at relatively little cost, longer R&D times are also generally associated with increased vulnerability to free riding from competitive imitation.46 Inventions that take longer to reach the market therefore will likely need stronger patent rights as an incentive for their R&D, whereas inventions with a shorter time-to-market usually warrant weaker or no patent protection.

Second, the Article argues that because time-to-market affects the pacing of sequential innovation, it is a strong predictor of the extent to which patents are likely to stifle subsequent improvements in the inventions they protect. The cumulative-innovation models predict that stronger patent awards stifle innovation more than they promote it when three conditions are present: (1) Earlier innovators would develop their inventions irrespective of stronger patent rights, (2) the patents granted to earlier innovators cover many later improvements in their inventions technologies, and (3) there are high transaction costs in negotiating patent licenses between earlier and subsequent innovators. The time-to-market for inventions is inversely related to all three conditions.47 Inventions that reach the market quickly tend to have a short product lifecycle (that is, they become obsolete faster), since it usually takes less time for firms to develop the newer inventions that replace them.48 In industries in which R&D times and product lifecycles are short, patents are often less important than first-mover advantages for motivating R&D. Patents are also more likely to read onto (or cover) several future generations of improvements, imposing a greater burden on subsequent innovators. Moreover, the competitive costs of negotiating patent licenses are also higher because short R&D times give subsequent innovators less time to reach a deal, and negotiation delays erode a larger portion of their inventions’ already short product lifecycle.49 Inventions’ time-to-market therefore provides a powerful indicator not only of inventions’ need for patent protection. It also predicts whether those patents are likely to impede subsequent innovation.

Lesser39 in constructing a new scoring system to reflect patent protection in the post-TRIPS era noted prior scores typically have in common the following components:

• protectable subject matter

The first iteration of the GP index quantified the strength of book-law patent protection for 110 countries, in five-year intervals for the period 1960–1990 (Ginarte & Park, 1997). It was subsequently extended by Park (2008) up to the year 2005 and for a total of 122 countries. The index is comprised of five constructs, namely: (i) patent coverage, (ii) membership of international treaties, (iii) enforcement mechanisms, (iv) restrictions on patent rights, and (v) duration of patent protection. The ‘coverage’ construct includes eight variables designed to capture the availability of patent protection in certain industrial sectors where patent protection is perceived as being particularly beneficial to the patent holder, such as the patentability of pharmaceutical products. The ‘membership of international treaties’ construct includes five variables relating to whether or not a country is signatory to patent-related treaties, such as the TRIPS agreement. It should be noted that the TRIPS agreement is concerned not only with matters relating to patents but also with other types of IP such as copyright and trademarks. The ‘enforcement mechanism’ construct captures the existence of laws that can enable patent enforcement, such as the availability of preliminary injunctions. Importantly, in the GP indices this construct concerns only the availability of book-law protection, not how such laws are actually enforced. Nor does it concern other enforcement-related activities. The ‘restrictions on patent rights’ construct considers the existence of laws that have the potential to negatively affectthe appropriation of patent rights by owners, such as those that enable the revocation of patents. Finally, the fifth construct, ‘duration of patent protection’, is measured by one variable where countries offering protection for less than 20 years from the date of application score lower than those meeting or exceeding this condition. The summated value of the binary variables constitutes the total index number for that particular construct. The overall patent protection score of a country reported in the GP indices then consists of the unweighted sum of component construct values, with scores ranging between ‘0’ (which signals an absence of patent protection in a country) and ‘5’ (which signals much higher levels of protection).

The patent system protects a wide array of technologies—everything from microbial fuel cells and radiolabeled pharmaceuticals to interactive cat toys and utensil holders for dishwashers.1 One of the defining characteristics of the current patent system is that it applies a uniform set of rules to all inventions, and it does not discriminate based on technology or industry. This uniformity is also one of the most problematic aspects of the patent system. There is overwhelming evidence that the system’s costs and benefits vary greatly across industries.2 Patents are critical for stimulating innovation in some industries, but they arguably stifle innovation in others. The government knowingly overlooks these differences when it awards patent rights on inventions. The justification for this oversight is not that a uniform patent system is optimal but rather that we do not have enough information about inventions to create an administrable system for tailoring patent awards that would benefit the public. This Article identifies the basis for such a system—inventions’ time-to-market. Certain types of inventions take much longer to develop than others, and a lengthier time-to-market strongly correlates with an increased need for patent protection and a lower risk that patents will stifle subsequent innovation. The government can use this relatively observable feature of inventions as the foundation for an objective and reasonably accurate system of tailored patent awards.

Scholars and policymakers have long recognized that our current patent laws cannot provide the optimal incentives for innovation.3 Patents are essential for motivating investment in research and development (R&D) in some circum- stances,4 but they also limit the public’s access to inventions through monopoly pricing. Given patents’ social costs, firms should receive the least amount of patent protection necessary to incentivize the research, development, and commercialization of their inventions. Though different amounts of patent protection are necessary to incentivize different inventions, the patent system largely ignores these differences.5 The government allows firms to patent almost any invention qualifying as useful, novel, and nonobvious,6 regardless of its R&D costs and most of the other economically relevant factors.7 After a patent is issued, it primarily operates as a one-size-fits-all reward for innovation, offering all patentees the same set of legal entitlements8 and the same twenty-year term of protection.9 This system inevitably provides excessive monopoly protection for a great many inventions, while also offering insufficient incentives for the development of others.10

Other scholars focus on the length of patent term protection. Economist Gary Becker has argued that “[t]he current patent length of 20 years (longer for drug companies) from the date of filing for a patent can be cut in half without greatly discouraging innovation.”104 He observed that “[e]ven pharmaceutical and biotech companies, the main examples where patents are clearly necessary to encourage innovation, usually do not need more than about a decade of monopoly power to encourage their very large investments in new drugs.”105 This view is supported by law professor Brian Love, who noted the negative impact of a long patent term:

In a world in which at least some products are out of date by the time they hit store shelves, the last few years of a two-decade-long patent term seem unlikely to incentivize greater innovation. To the contrary, it appears that the waning years of patent protection primarily benefit litigation-oriented patentees who do little more with their aging patent rights than impose steep legal costs on those selling successful products. 106

Changes in coverage are a key driver of changes in the patent rights of the top three quintiles. In the top quintile, the increase in coverage reflects the expansion of patentable subject matter to software and biotechnology. In the second and middle quintiles, the increase in coverage is due to the allowing of pharmaceutical, food, and chemical patents. In contrast, the increase in coverage is small in the bottom quintile since a number of countries in this group have not (yet) extended patent protection to pharmaceutical and chemical patents. In summary, similarities and differences exist in the sources of change in patent rights by level of economic development. For all income groups, increases in membership in international agreements and enforcement mechanisms are key sources of change in patent rights, while increases in duration are a limited source. The main difference among income groups is that an expansion in patentable subject matter is observed primarily among the richest 60% of countries. Why this is so is worth researching further. One possible reason that higher income economies are more apt to expand coverage is that they possess a relatively greater capacity to innovate in more differentiated fields of invention. The legal authorities, from this perspective, accommodate the increased demand for patent protection in growing fields or industries.

Economic analysis of patent terms began in earnest in the late 1960’s through the work of William Nordhaus, who looked at the “optimal patent life” and found that there was little effect on welfare from extending patent terms beyond ten years.87 Follow-up work by F.M. Scherer proposed a flexible system under which patents would initially be granted a shorter term, with extensions where needed. 88 He believed that a flexible, product-specific patent term system would be appropriate. 89 He noted that a good policy “would tailor the life of each patent to the economic characteristics of its underlying invention,” which could be achieved “through a flexible system of compulsory licensing, under which the patent recipient bears the burden of showing why his patent should not expire or be licensed at modest royalties to all applicants three or five years after its issue.”90

In the following years, various legal and economic scholars have weighed in. Paul Klemperer, an economist at Oxford University, suggested that “optimal patent policies vary across different classes of products.”91 In the late 1990s, economist Thomas Mandeville pointed out the problem of a unified patent term system, in which he observed that “[a] new perspective on the patent system, indeed a new theory of the patent system is needed.” 92 In this regard, Mandeville suggested taking into account of the “economic characteristics of information.” 93 Similarly, Lester Thurow questioned the rationality of providing an equal patent duration to all inventions on the grounds that the contribution and cost for each invention can be vastly different. 94 He proposed an optimal patent system, which would take into account the technology and income of the country, the industry, and the type of knowledge. 95 For instance, he used electronics and pharmaceutical invention as examples, with the former warranting a shorter term and the latter deserving longer protection. He also believed that “fundamental advances” and “logical extensions of existing knowledge” should be treated differently.96

In the following years, various legal and economic scholars have weighed in. Paul Klemperer, an economist at Oxford University, suggested that “optimal patent policies vary across different classes of products.”91 In the late 1990s, economist Thomas Mandeville pointed out the problem of a unified patent term system, in which he observed that “[a] new perspective on the patent system, indeed a new theory of the patent system is needed.” 92 In this regard, Mandeville suggested taking into account of the “economic characteristics of information.” 93 Similarly, Lester Thurow questioned the rationality of providing an equal patent duration to all inventions on the grounds that the contribution and cost for each invention can be vastly different. 94 He proposed an optimal patent system, which would take into account the technology and income of the country, the industry, and the type of knowledge. 95 For instance, he used electronics and pharmaceutical invention as examples, with the former warranting a shorter term and the latter deserving longer protection. He also believed that “fundamental advances” and “logical extensions of existing knowledge” should be treated differently.96 More recently, a number of lawyers and economists have advocated for flexible and shorter patent terms. Law professor Michael Carroll criticized the flat twenty-year patent term for all industries.97 And in his book Launching the Innovation Renaissance, economist Alex Tabarrok also questioned the notion that all patents should be twenty years long.98 He suggests that:

[P]atents should be stronger in industries with high innovation-to-imitation costs such as pharmaceuticals and weaker in industries with low innovation-to-imitation costs such as software. Patents of say three, 10 and 12 years could be offered with the divisions either based on industry—with software and business-method patents getting three years, pharmaceuticals 20 years, and other innovations 10 years—or based on evidence of sunk costs. An innovator that wanted a three-year patent, for example, need not offer any evidence on sunk costs and would receive a quick response. Innovators applying for 10- and 20-year patents would have to provide more information and would need to pass a higher hurdle. 99

It is often argued that a country's long-term performance depends to a significant extent on the quality of its institutions, including its political and legal institutions (Acemoglu et al., 2005). Economic research mostly focuses on explaining long-term differences in growth rates. As seen above, some researchers argue that high inequality will reduce growth rates, among other things, because it can worsen institutional quality. However, besides facilitating economic growth, public institutions have other functions that matter from a long-term perspective. For example, disaster preparedness, education, public health, foreign policy, science policy, and many other areas could influence the expected value of the long-term future. If such things go badly, they could increase existential risk. Conversely, good institutions will help reduce existential risk. For many existential risk reduction strategies likely require public goods and collective action, which in turn require good public institutions (among other reasons, because some such public goods are unlikely to be provided by markets). So, it seems reasonable to assume that, with most other societal goals, good institutions can help deliver existential risk reduction. Here is a cheesy analogy: targeted actions like washing your hands regularly or getting a flu shot can reduce your risk of dying from an infection. But you will also do well investing in a strong immune system, as that is an ‘all-purpose good’ in lowering your risk of dying from any bacterium or virus. Investing in good institutions might similarly be an all-purpose-good: rather than tackling individual sources of existential risk directly, we improve conditions for tackling whatever existential risks may come our way.

There are several reasons why higher inequality could weaken institutional capacities for longtermist public goods.

The explosion of inequality over the past four decades is appropriately a major focus of the political agenda for progressives. Unfortunately, policy prescriptions usually turn to various taxes directed at the wealthy and very wealthy. While making our tax structure more progressive is important, most of the increase in inequality comes from greater inequality in before-tax income, not from reductions in taxes paid by the rich. And, if we’re serious about reversing that trend, it is easier, as a practical matter, to keep people from getting ridiculously rich in the first place than to tax the money after they have it.

While the Reagan, George W. Bush, and Trump tax cuts all gave more money to the rich, policy changes in other areas, especially intellectual property have done far more to redistribute income upward. In the past four decades, a wide array of changes—under both Democratic and Republican presidents—made patent and copyright protection both longer and stronger.

Over the past decade we have witnessed how big concerts of hip-hop musicians and other artists influenced not just the people but economies all together. However, nowadays this influence has spread to film industries too as we have witnessed with “Barbihimmer” debut. Let’s delve into how the new waves in the entertainment industry shapes our economies of today.

Entertainment industry in large encompasses many fields: film, television, music, gaming and more. Today, each of these branches of the industry make out over $20 billion separately in just a year. For instance, in less than a month, a single “Barbie” movie with Margot Robbie has made over one billion in revenue? USD, which has broken all the previous records in the history of the film industry. Such shocking numbers make us only wonder what the entertainment industry is about to bring out into our economy.

Two of the most enduring arguments against a lengthy term of copyright are taken from the publishing industry. Specifically, they are based on conversations with, and testimonials from, booksellers themselves.

The intuition that the commercial lifespan of information goods is far shorter than copyright's term is not new. Perhaps the earliest such account can be found in a speech against a proposal for the extension of copyright given by Thomas Macaulay in the House of Commons on February 5, 1841:

Rent-seeking activities are a natural consequence of any fixed copyright term, since the Congress that enacts the term cannot prevent future Congresses from increasing it retroactively. There will always be copyright holders whose incomes are diminished when their works fall into the public domain, and they have an incentive to expend resources on seeking retroactive extensions as the end of the copyright term draws near. This rent seeking would be lessened by indefinite renewability, which by eliminating the prospect of losing the income produced by old but still valuable copyrights would largely eliminate the incentive to lobby for copyright extensions. “Largely” rather than “entirely” because some resources might still be expended on lobbying for lower renewal fees and longer renewal terms. But normally it would be cheaper to pay the renewal fee than to try to change the law. And while a system of indefinite renewals limited to future copyrights would not curb the incentive to seek retroactive extensions of existing copyrights, that problem would disappear in time as old copyrights lost their value.

A particularly unfortunate aspect of congressional extensions of the copyright term is that they apply to all copyrighted works, not merely those whose owners lobbied for the extensions. Disney might have sought a private bill that would have extended only its copyrights, but a politically more effective strategy was to ally itself with other copyright owners and represent that the legislative relief sought would benefit all creators of intellectual property, not just Disney and a handful of rich heirs. But the result of the blanket extension of the copyright term was that a huge amount of intellectual property having little or no commercial value, yet potential value as a public domain input into future intellectual property, will be kept out of the public domain for another twenty years.

Science diplomacy has many faces. One of them is viewing scientific collaboration as a possible tool to keep dialogue lines open between states in conflict. More often, science is mobilized for diplomatic purposes or conflict resolution, as part of countries’ foreign-affairs apparatuses. The rationale is that scientists speak the same “language”, which can weave cultures together and build trust, irrespective of political animosities between governments. In this context, science diplomacy is frequently considered a soft-power tool. However, science can also be a tool in the hard-power arsenal—instead of stimulating scientific connectivity, science can be targeted by sanctions that make collaborations difficult or impossible. Sanctions could entail cutting funds for international scientific collaborations and isolating scientists in the targeted country from the rest of the world. Sanctions of this nature can, paradoxically, thus be regarded as an alternative form of science diplomacy. While the deployment of coercive power is justified in times of war, one must still ask to what extent science diplomacy should fall within the arsenal of hard-power tools. This article will address this question within the context of the current war in Ukraine.

3.2 The prevailing trend in most simulations was that increasing the copyright term resulted decreased knowledge production. The declining trend is intuitive, because under shorter copyright protection regimes access to published articles goes up and scholars can more easily read and cite discovered knowledge. Consequently, scholars can publish new papers more rapidly. The impact of increase in copyright cycles is more dramatic when the required citations are higher. For example, when eleven citations are needed, the number of published papers declines about seventy percent when we extend copyright protection from zero to two hundred cycles, while the drop in publications is only about twenty percent where required citations are five (see graph 1). Although the general trend is intuitive, there are several more specific features of the results that are particularly interesting.

3.3 First, the decline in knowledge creation was steep with respect to increases in shorter copyright terms and relatively flat with respect to increases in longer copyright terms. For example, in the scenario where we require eleven citations, 63 of the 70 percent total decline in knowledge production happens when copyright is increased from 1 to 25 cycles. The curve begins to flatten with respect to increases after 25-cycle point. However, when the required citation is lower, we see a more gradual decrease in knowledge creation. The increase from 150 to 200 cycles has very little negative impact regardless of citation requirements.[16] The same trends also occur with respect to the impact of copyright term on citation rates, where the results are qualitatively similar to those regarding publications.

But in a set of slides he made in 2013, Beckstead makes a compelling case that while that’s certainly part of what caring about the far future entails, approaches that address specific threats to humanity (which he calls “targeted” approaches to the far future) have to complement “broad” approaches, where instead of trying to predict what’s going to kill us all, you just generally try to keep civilization running as best it can, so that it is, as a whole, well-equipped to deal with potential extinction events in the future, not just in 2030 or 2040 but in 3500 or 95000 or even 37 million.

In other words, caring about the far future doesn’t mean just paying attention to low-probability risks of total annihilation; it also means acting on pressing needs now.