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One possible response to patent law’s inability to screen out antisocial innovation is for the government to rely less on patents as incentives and, instead, to favor more targeted interventions. In other words, the prevalence of antisocial innovation should inform both the “who decides” and “who pays” debates regarding allocation of innovation funding. As we outlined above, policymakers have a range of different mechanisms for encouraging innovation, including—in addition to patents—grants and prizes.394 Recent consensus has tended to prefer patents to grants and prizes, because the latter have increased informational demands for the government.395 The government must have a sense of which innovations will be most valuable, how much motivation is needed to pursue them, and, in the case of grants, which innovators are most likely to succeed. Patents, in theory, solve these informational problems by relying on consumers and markets to pick winners and motivate innovation.

This Article has shown, however, that our faith in innovation markets—and thus in patents—is overblown. Many markets are far from perfect and will tend to generate products that do not make people better off on balance. And due to cognitive biases or addiction, consumers may repeatedly purchase products that harm them. Finally, markets will often fail to internalize innovation’s costs to the environment and privacy, and its impact on distributional outcomes. To the extent that this is correct, policymakers should, all else equal, tend to prefer more directed innovation incentives like grants and prizes.396

We begin by noting that two of society’s most important tools for promoting innovation—patents and antitrust law—treat all innovation as socially valuable.43 Borrowing from administrative law, we refer to this as the Inverse Precautionary Principle.44 While some regulatory agencies apply the Precautionary Principle, whereby new activities should be regulated if they pose any meaningful risk of harm,45 patent and antitrust law apply the inverse—all innovations should be promoted irrespective of their risks.46 Outside of pharmaceuticals and some other chemicals, our innovation governance approach is one of “beneficial until proven harmful.”

A more nuanced framework, however, is required. Policymakers should realize that innovation governance involves risk-risk tradeoffs.47 While excessive regulation may deprive society of valuable new inventions, insufficient regulation poses serious, even catastrophic risks to society. Innovation necessarily produces new and, thus, unknown pathways. It may be difficult for policymakers and regulators to know, early on, whether an innovation will be salutary, harmful, or neither. But once they recognize that society’s only compelling interest in innovation currently is to generate more of it, their strategies should change.

Second, in an indirect way, the patent system can reduce negative externalities by constraining the dissemination of harmful or undesirable inventions. While patents aim to promote invention, observers have long recognized that too much patent protection can have the opposite effect.145 Innovations are often subject to multiple, overlapping patents, and the need to clear all of these exclusive rights may be prohibitively expensive. Scholars have extensively explored the innovation-dampening effects of so-called "anticommons" and "patent thickets."146 In a provocative article, Professors Chris Cotropia and Jim Gibson argue that the ability of patents to inhibit innovation can have some unexpected benefits.147 In particular, patents can impede innovation and dissemination of technologies in harmful industries. As a descriptive matter, however, several of the industries that Cotropia and Gibson examine, such as biotechnology, seem to be thriving quite well with robust patent protection. Additionally, as a normative matter, it is far from clear that industries like biotechnology are ones that we would want to suppress, a point that the authors recognize.148 Cotropia and Gibson offer a valuable insight that policymakers can use patents o restrain innovation in undesirable areas. However, as presently constituted, the patent system does not do much in this regard in any targeted fashion.

Another requirement of patentability-patentable subject matter-also does little to reduce negative externalities. An invention must satisfy the threshold requirement of patentable subject matter in order to be eligible for patenting.141 On rare occasions, patent authorities have excluded certain classes of inventions from patentable subject matter, ostensibly on moral grounds. For instance, in the late 1990s, the PTO denied a patent application claiming human-animal chimeras.142 While it stated that this invention did not constitute patentable subject matter, lurking in the background were moral concerns over this technology. Unease about cloning technology and patenting humans led to a statutory carveout in the 2011 America Invents Act establishing that claims directed to or encompassing a human organism are not patentable subject matter. 143 While restrictions on patent eligibility could, in theory, deny patents on immoral inventions likely to generate high negative externalities, such exclusions are quite limited. Moral concerns play a very small role in narrowing patent eligibility in U.S. patent law, particularly compared to other jurisdictions.144

It is also helpful to briefly address the objection that the patent system aims to promote technological progress, so it should not internalize negative innovation externalities. After all, doing so would chill inventive activity. This Article addresses this objection more fully below,137 but for now it is sufficient to say that this argument misunderstands the objectives of the patent system. While the patent system seeks to promote technological progress, it does not aim to do so at all costs. Rather, it aims to maximize efficiency in the allocation of resources for innovation. Maximizing efficiency, moreover, must entail considering costs as well as benefits, including positive and negative externalities.

Given that patents exist to internalize positive externalities from innovation, it is important to consider their role in internalizing associated negative externalities as well. Here, this Article reveals a striking asymmetry. Patents do very little to internalize technology's harmful effects on third parties. Patents operate as a one-way ratchet wherein inventors capture some of the external benefits of their inventions but are insulated from their external costs. In minimal and indirect ways, patents can help to internalize or prevent negative innovation externalities. However, their treatment of such negative externalities is a far cry from how they directly internalize positive externalities.

Patented technologies such as Facebook's filter bubble, autonomous driving innovations, and predictive policing systems generate negative externalities, but patents do very little to internalize them. Patentees of these technologies can profit from practicing these inventions, licensing them to other parties, or suing unauthorized users for infringement. The sweep of patent rights is so broad that Facebook can sue someone for infringement even if Facebook does not practice its invention and even if the infringer did not copy Facebook's technology. However, if Facebook's filter bubble degrades political discourse for millions, patents play no role in internalizing this negative externality. The same is true for patented autonomous vehicle innovations, predictive policing systems, and millions of other proprietary technologies.

Contrary to this received wisdom, however, patents do little to internalize negative externalities. Many mechanisms by which physical property rights internalize negative externalities do not apply, or do not apply to nearly the same extent, to patents. First, patents do not internalize negative externalities associated with the tragedy of the commons because this tragedy does not apply to the nonrival technical information at the heart of inventions. Such technical information cannot be overconsumed, and so the tragedy of the commons is inapposite. More importantly, rather than encouraging patentees to conserve protected assets, the time-limited nature of patents encourages them to exploit technologies rapidly. Such rapid exploitation is not conducive to patentees engaging in unhurried consideration and mitigation of externalities. Second, patents do not realistically facilitate efficiency-maximizing transactions between technology owners and individuals harmed by their technologies. Although patents lower some transaction costs, private negotiations remain prohibitively costly due to the large number of parties involved and the availability of technological substitutes for any given patented invention. Third, unlike property rights, patents create no duties for resource owners to limit harms imposed on external parties. Nobody has a right to be free from the effects of a patented invention. In sum, patents are a one-way ratchet that allows patentees to internalize positive externalities from technological innovation but does very little to internalize associated negative externalities.

These theoretical insights have significant practical payoff.

Turning to normative analysis, this Article argues that patent law's externality asymmetry contributes to a host of social ills. Most prominently, it undermines efficiency. Reflecting the enduring influence of law and economics, the objective of efficiently allocating resources for innovation has dominated normative discourse on the patent system. However, by not providing effective mechanisms for internalizing negative externalities, patents likely overincentivize innovation, incentivize the wrong mix of innovations, and provide suboptimal incentives for technological design. While scholars have critiqued the patent system on several grounds other than efficiency, even within the dominant idiom of efficiency, it falls short. Looking beyond efficiency, patent law's externality asymmetry causes other harms as well by undermining distributive equity and fairness.

Patent law in the United States is historically premised on advancing the interests of society. From the store of productive activity available to all, the government restricts some activities for a limited time in hopes this will redound to the benefit of all by incentivizing innovation1. The law thereby restricts competition, forgoing the concomitant advantages of the free market, but only during the patent period. After that time, the law expects that competition will enter, driving down prices and spurring new innovation. From this perspective, US patent law centers on the benefit to the public, with the inventor’s reward providing the vehicle for accomplishing this jurisprudential goal.

In the health care space, these incentives have resulted in extraordinary success stories, but the same incentives can also result in a range of undesirable consequences, including excessive development of similar (but not better) products (‘me-too drugs’), the focus on drugs for diseases that affect wealthy people and wealthy countries rather than diseases that disproportionately affect the poor and developing nations, and a lack of innovation for types of medicines that may return fewer profits, such as antibiotics2–4. Similarly, drug companies will not research the utility of a known (and hence unpatentable) chemical, since the ability to obtain patent protection is central to their business model5.

2. Environmental Harms. It is abundantly clear that innovations can harm the environment. Scientists attribute a substantial portion of global climate change to human activities, many of which are the result of previous innovations.213 Obviously, coal-based electricity plants and gasoline-powered internal combustion engines are responsible for an enormous share of environmental pollution.214 This is not to say that electricity and automobiles have been a net negative for society. We don’t think so. But there are many innovations that have generated substantially fewer benefits while producing meaningful environmental degradation.

Sometimes, innovations can harm the environment directly. For example, hydraulic fracturing, also known as fracking, is believed by many scientists to cause increases in air toxins and substantial harm to groundwater.215 In addition, mining scarce minerals that are required for contemporary computing devices may be destroying environments in already ecologically stressed parts of the globe.216 And, of course, many innovations generate enormous amounts of air and water pollution.

This Article highlights an underappreciated facet of technology's harmful effects: many technologies that generate negative externalities are patented. In an unsettling irony, the patent system significantly subsidizes the development of technologies that impose uncompensated harms on third parties. To better understand this phenomenon, this Section turns to case studies of three patented technologies that produce substantial negative externalities.

1. Facebook's "Filter Bubble" and Ideological Polarization

Technology, however, also has a dark side. While the economics and IP literature has extensively examined the positive externalities of technology, it has devoted less attention to technology's negative externalities.56 Technology produces a wide range of negative externalities, including serious harms to physical health and the environment. For example, prescription opioids were once heralded as safe and effective painkillers. However, they have caused an epidemic of addiction and misery involving nearly 500,000 overdose deaths in the United States.57 The opioid crisis cost the U.S. economy $631 billion from 2015 to 2018.58 These costs have largely been external to opioid manufacturers and distributors, though recent litigation has aimed to at least partially internalize these negative externalities.59 For generations, "dirty" technologies, from coal-burning power plants to automobiles, have contributed to arguably the greatest threat facing humanity: global climate change.60 Chemical fertilizers ramped up food production, but they have also enormously increased reactive nitrogen levels throughout the environment.61

Technology also generates negative externalities by harming mental health, well-being, and social connectedness. Numerous studies indicate that adolescents and young adults who spend more time on digital media report lower psychological well-being.62 A 2019 poll by the American Psychiatric Association found that thirty-eight percent of adults view social media usage as harmful to mental health.63 Academic performance is negatively correlated with instant messaging, social networking sites, engaging with smartphones, and use of electronic media more generally.64 Heavy use of digital media is also correlated 65 with a loss of empathic accuracy. Developers of computers, Artificial Intelligence, and robots do not bear the psychological costs of users' loss of human connection and intimacy from interacting with machines instead of people.66

The stakes of addressing the negative externalities of innovation are enormous. Undergirding the seemingly abstract concept of externalities are real harms caused by patented inventions. Technologies that the patent system actively subsidizes are degrading political discourse, eliminating jobs, and likely contributing constitutional violations. Patents and market-based systems of technological development enjoy a presumption of efficiency in the allocation of resources for innovation. However, markets are unlikely to allocate resources efficiently if they ignore wide swaths of external costs. This Article highlights the underappreciated reality that patented technologies generate uncompensated third-party harms; attention to externalities (both positive and negative) will lead to more enlightened innovation policy and more efficient resource allocation.

This Article argues that patent law exhibits a striking and overlooked asymmetry: while patents do much to internalize positive innovation externalities, they do very little to internalize negative innovation externalities. This Article refers to this underappreciated dynamic as patent law's externality asymmetry. As noted, patents exist for the core purpose of internalizing positive externalities. However, patents do almost nothing to internalize negative externalities. On rare occasions, the patent system has denied patents on "immoral" inventions (which may generate significant negative externalities), and a proliferation of patents can in theory slow progress in potentially harmful fields.12 In practice, however, patents allow inventors of social media, automation, and big data technologies to profit from their inventions while doing nothing to internalize these technologies' external costs. Notably, the patent system is massively subsidizing the invention of technologies that impose uncompensated harms on others.

Humanity's relationship with technology will define the twenty- first century. Technological innovations permeate the most important and intimate areas of life, shaping how we maintain our health, obtain critical information, and connect with loved ones. Technology has advanced to dizzying heights, from 5G wireless networks transmitting data at unprecedented speeds to novel mRNA vaccines developed to combat the coronavirus pandemic.2 The value of technology is so great that the Constitution authorizes a patent system to confer exclusive rights on new inventions, thus promoting technological progress. However, alongside significant promise, technologies-including patented technologies-present many perils. Facebook's patented content-filtering system provides "curated" information to users that reinforces their ideological views, thus exacerbating polarization throughout the electorate.4 Autonomous vehicles based on patented technology threaten the jobs of millions of professional drivers.5 Patented predictive policing systems based on "big data" can lead to unconstitutional searches and seizures.6

Put differently, patented technologies can generate significant negative externalities. Externalities are benefits or costs imposed on third parties that are external to a decisionmaker. Externalities may be positive, as when an individual gets vaccinated and thereby reduces disease transmission for everyone else.7 Conversely, they may be negative, as when a factory belches pollution that harms nearby residents. Economists warn that significant externalities are problematic because they can lead to inefficient resource allocation. For instance, if a factory does not bear the cost of polluting others, it will operate at a higher capacity than is socially optimal. The classic remedy for externalities is to "internalize" them, which refers to all public or private measures for ensuring that decisionmakers consider external benefits or costs in making some decision. One way of doing so is to hold producers of positive and negative externalities accountable for the benefits and costs, respectively, that they impose on others.

6. Societal Harms. Innovations sometimes do more than harm individuals or competitors; they damage society itself. We enumerate this category to capture a wide variety of antisocial outcomes that are more generalized than the particularized harms described above. We focus on three issues: risks to democracy, risks to the financial system, and distributive harms. Each of these issues is hugely important, and we can do no more than scratch the surface of any one of them in this Article.

The risks that social media poses to democratic values are becoming increasingly apparent. In addition to its addictive qualities, which hurt many users, social media is a conduit for dangerous misinformation and conspiracy theories.304 Russian operatives have repeatedly used social media to spread propaganda designed to undermine free and fair elections in the United States and other democracies.305 Compelling evidence exists that in both 2016 and 2020, Russia used Facebook and other social media outlets to support the Trump campaign and to sow division among Americans.306 In a post-mortem on the 2016 election, the Senate Intelligence Committee, then led by Republicans, concluded that Russia’s social media strategy “was overtly and almost invariably supportive of then-candidate Trump.”307 Committee Chairman Senator Richard Burr explained that Russia “flood[ed] social media with false reports, conspiracy theories, and trolls” to “exploit[] existing divisions” in U.S. society and “breed distrust of our democratic institutions and our fellow Americans.”308

1. Individual Harms. Perhaps most obviously, innovations can hurt the people who are exposed to them, and they can hurt them in a variety of different ways—physically, emotionally, and financially.188 Harms to individuals can come about in many different fashions, some of which are intentional while others are accidental by-products of other goals.

Often it may be beneficial for innovative firms to hurt people directly and intentionally. As the figures above indicate, harms to individuals will arise when firms have not been made to internalize the costs of their innovations to others in society.189 Although the innovation is privately beneficial to the firm, it imposes net social costs on others exposed to it. For example, the pricing algorithms firms use to obtain greater profits by marking up goods to specific customers clearly benefit the firms employing them at the expense of consumers who will pay higher prices.190 The whole point of pricing algorithms is to extract value from consumers, and consumers may have little choice but to interact with them.191 In other cases, new innovations may benefit some people at the expense of others. Consider, for example, the substantial increases in the size and weight of passenger trucks and SUVs over the past couple of decades.192 In recent years, trucks and SUVs have grown significantly, with the best-selling trucks now over fifty-five inches tall—the average height of an eight-year-old.193 They are also far heavier—more than half a ton—than they were in 2000.194 Larger trucks are safer for their occupants,195 and their size and aggressive styling may appeal to some consumers. But these vehicles are horrifically more dangerous than smaller ones to people outside of them, like other motorists, cyclists, and pedestrians.196 Their larger blind spots increase the probability of accidents, because drivers can’t see as well.197 And when accidents do happen, they are much more deadly, because the vehicles weigh so much more.198 Thus, we have a situation in which a smaller number of people are made better off at the expense of a larger number who are put in more danger.

Given the extensive investment that society directs towards innovation, one might conclude that it’s a uniformly wonderful thing. Certainly, we are all grateful for anesthesia, clean drinking water, and indoor plumbing. But just because some innovations improve the quality of life doesn’t mean that all—or even most—do. In this Part, we begin to explore innovation’s dark side, the ways in which new developments and technologies can make people’s lives worse. First, we describe the developing scholarly literature on antisocial innovation in contexts ranging from health and medicine to telecommunications and investing. Our goal here is simply to introduce the fundamental concern. We elaborate on it more thoroughly in the next Part. This Part concludes by addressing the mechanisms that policymakers have used to combat antisocial innovation, including regulation and tort law.

A. ANTISOCIAL INNOVATION

According to all these perspectives, the biggest concern with innovation is that society might not get enough of it. Without massive government funding or monopolistic patent pricing, we may miss out on the next round of innovations that will increase economic growth, propel society forward, and improve human well- being. But what if that’s not the whole story? What if it turned out that a substantial portion of innovative activity was actually bad for society as a whole? In this Article, we make just this argument. While we are, of course, thrilled to be able to research and write this Article on internet-enabled computers, with access to clean water, indoor plumbing, antibiotics, vaccines, and a host of other modern conveniences, we don’t view these transformational innovations as typical. No doubt, many innovations have radically transformed human lives, prolonging and improving them. But we shouldn’t let these breakthroughs distort our view of innovation as a whole. Vanishingly few innovations dramatically improve society, while many don’t really affect it at all. And, we argue, a distressingly high number make life worse. We call these antisocial innovations.

Almost no innovations are purely antisocial, in the sense that they produce only harms and no benefits. Bump stocks, which enable semi-automatic firearms to operate like fully automatic weapons, may come close, in the sense that they have no meaningful military use and exist primarily to evade regulation of machine guns.25 More typical are innovations where the benefits to one group are outweighed by the costs to other interests. Consider the following examples.

(Huajie, “The Contradictions of Capitalism, “Greening” of Capitalism and the Lessons From Fuzhou’s Socialist Ecocivilization Construction,” Capitalism Nature Socialism, Volume 32, Issue 3, 23 Jun 2020, Taylor & Francis, accessed 2/2/2022, -tmur)

By its very nature, the “greening” of capitalism is not so much the purported solution to the ecological crisis but rather the hoped-for solution to the crisis of capitalism itself. It is capitalism that maintains its survival by the “ecological fix” (Smith 2007; Castree 2008). As said before, the essence of capitalism is valorization. “Growth or Death” is its iron law, pursuing the maximization of surplus value its ultimate goal. Therefore, maintaining capital accumulation is the law of capitalist survival, and natural resources are the basic production conditions for capital accumulation. In this regard, the first wave of the “greening” of capitalism is an inevitable response of capitalism in the face of the danger that the production conditions constituted by natural resources will be exhausted. The continued accumulation of capital triggers a crisis of over-accumulation, which can be solved only by a vehicle able and willing to “absorb” the excess capital. Capital must find a carrier that “absorbs” excess capital to resolve this crisis (Baran 1966). The stage of free competition and private monopoly capitalism in the 19th century was based on the steam engine and railway construction as carriers. Fordism before the 1970s was based on fossil fuels and automobiles as carriers (Harvey 1990; Freund and Martin 2000). When the role of “absorption” is exhausted, capital seeks “environment” to act as the next carrier to resolve the capitalist crisis, which leads to the second wave of the “greening” of capitalism. As part of this wave, unlike before, the status and role of environment in capital accumulation are not only a precondition for capital accumulation but themselves have become an important strategic fields of capital accumulation, wrapped in a “green” coat continue to seek surplus value maximization. Despite this difference, the two waves of “greening” of capitalism are continuing their essential function of keeping capitalism in existence.