Regulations on immoral inventions solve negative externalities.

In some minimal and indirect ways, patent law can internalize negative externalities (or prevent them from arising in the first place). First, the patent system has applied certain requirements of patentability to deny patents on "immoral" inventions, which presumably have significant potential to create negative externalities. For example, historically the patent office and courts applied the doctrine of moral utility to deny patents on inventions that contravened public morals.138 Under this doctrine, "a new invention to poison people, or to promote debauchery, or to facilitate private assassination"139 would fail the moral utility doctrine and not receive a patent. However, the moral utility doctrine has largely fallen into desuetude because of institutional competence limitations: the Patent and Trademark Office (PTO) and courts are not arbiters of public morality.140 While it had some historical bite, the moral utility doctrine does little these days to deny patents on so-called "immoral" inventions and reduce associated negative externalities.