Patents assume all innovation is beneficial till proven harmful. Targeted prizes and grants for prosocial innovation are a better way to promote innovation while avoiding antisocial harms.

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.

More concretely, our account of the magnitude of antisocial innovation counsels a shift from patent incentives towards more targeted incentives like grants and prizes. Patent law is agnostic to an invention’s utility.48 A patent on a vaccine is just as valid and lasts just as long as one on a bump stock or a chemical that devastates the planet. Patent law relies on markets to sort out good innovations from bad ones.49 Due to distortions, externalities, and cognitive biases, however, markets are often not great at picking society-wide winners and losers.50 Accordingly, policymakers should consider spending a greater proportion of their innovation- incentivizing dollars on grants and prizes that are devoted to prosocial developments.