Broadly weakening the patent regime decks innovation

Critics of injunctions had hoped that reducing the availability of injunctions would have a positive effect on innovation—notably by reducing patent holdup.[64] But empirical research by Alexander Galetovic, Stephen Haber, and Ross Levine suggests that this was not the case: Overall, the eBay decision does not appear to have significantly affected innovation levels in patent-intensive industries.[65] Other authors have reached a similar conclusion.[66] However, the fact that the eBay ruling has not yet reduced innovation is no guarantee that it will not do so in the future. Likewise, as this paper makes abundantly clear, the eBay ruling is but one of many policy developments that have weakened the legal protections afforded to patent holders (or that threaten to do so). While each of these developments might not individually have a statistically significant effect on innovation (which is what the Galetovic, et al. paper looks at in relation to the eBay ruling), the cumulative effect of these changes could be much larger. In other words, available evidence suggests that the threat of injunctions is unlikely to cause patent holdup and reduce innovation. However, this does not suggest that systematically weakening the patent system would have no effect on technological progress.