Patented technologies generate significant negative externalities, including job losses, political polarization, and violations of constitutional rights.

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.