Courts are better at making IP policy, especially for emerging technologies.

5-1-2009. https://academic.oup.com/chicago-scholarship-online/book/17136/chapter/174495140

Even if industry-specific patent legislation is legal, we are not persuaded that it is a good idea, for several reasons. First, while economics can make useful policy suggestions as to how patents work in different industries, we are skeptical of the ability of a statute to translate those suggestions into detailed patent rules for each industry. Many of the predictions of economic theory are fact-specific—they suggest different factors that should bear on the outcome of particular cases, but that require case-by-case application that cannot easily be captured in a statute. Economic theory is more useful in making general suggestions about how the patent system can be adapted to particular factual contexts than it is dictating hard and fast statutory rules.

Second, rewriting the patent law for each industry would involve substantial administrative costs and uncertainty. Congress would have to write new statutes not just for biotechnology and software but for numerous different industries with special characteristics. Semiconductors, pharmaceuticals, chemicals, nanotechnology,22 telecommunications, and other industries would all need separate statutes. District court judges, who already have enough trouble learning the arcane rules of patent law in the relatively few patent cases they hear, would have to learn a host of new statutes. The law supporting these statutes would be slow to develop, since fewer cases would come up involving each statute. The resulting uncertainty might enrich lawyers, but it surely would not be conducive to encouraging innovation.

Industry-specific legislation would also require a great deal of line drawing, as the boundaries between industries are vague and notoriously mutable. Semiconductor manufacturers and computer hardware companies patent and use software all the time. So, for that matter, do carmakers. Indeed, one study suggests that most software patents are obtained not by software companies but by hardware or electronics manufacturers. Drug delivery systems might be thought of as medical devices, pharmaceuticals, or biotechnology; presumably a different law would apply depending on how the invention was characterized. Even technologies that seem radically different, such as biotechnology and software, may unexpectedly converge, as recent developments in bioinformatics and proteomics have made clear.23 Further, a significant percentage of inventions fall into more than one field. John Allison and Mark Lemley find that on average each patented invention fits into 1.5 different technology categories,24 a number that is increasing with time.25 And new fields arise regularly. Nanotechnology, for example, combines advances in semiconductors, biotechnology, materials science, and even optics. As a result, it would prove impossible to carve up innovation into static fields. Imagine trying to fit all modern inventions into categories created fifty or one hundred years ago. The result would likely be a combination of constant legislative tinkering with categories and a system that was nonetheless behind the times.

Past experience with such specialized statutes is also not encouraging. The history of industry-specific statutes suggests that many fail because they are drafted with then-current technology in mind and are not sufficiently general to accommodate the inevitable changes in technology. In the United States, the poster child for failed sui generis legislation has been the notoriously neglected Semiconductor Chip Protection Act, or SCPA (17 U.S.C. §§ 901–914 [2000]). Passed at the behest of the U.S. semiconductor industry after six years of legislative debate, the SCPA created a detailed set of rules designed to protect the “mask work” or circuit design pattern etched into semiconductor chips. The statute was tailored specifically to the purported needs of the industry, including special provisions on reverse engineering and other practices common to semiconductor circuit design. The ostensible reason was to protect American innovation from foreign competitors. But the statute has virtually never been used to enforce the rights it created, generating only two published judicial opinions in the quarter century since its enactment.26 The most likely reason is that the particular focus of the SCPA (duplication of mask works) is obsolete because the nature of the semiconductor business changed to make the manufacturing process much more difficult and hence harder to imitate at low cost.27 The foreign competition so feared by U.S. chip fabricators has not vanished, but it is not based on imitation of the sort the SCPA prohibits, and in any event the industry appears to be thriving without recourse to its specialized statute.