Patents don’t improve cybersecurity – monopsony and eminent domain
Tabrez Y. Ebrahim 2020 Cal Western Law Prof Associate Professor of Law, California Western School of Law “NATIONAL CYBERSECURITY INNOVATION “ WEST VIRGINIA LAW REVIEW https://researchrepository.wvu.edu/cgi/viewcontent.cgi?article=6321&context=wvlr [MSDI-JE-wk1]
Lastly, the perceived informational benefits of utilizing patents and markets to allocate resources for national cybersecurity innovation would not apply and are largely inapposite. A classical argument in favor of patents for technological development is that market exchanges create price signals that allocate resources for invention more efficiently than centralized planning. While the information efficiency of markets justifies the patent system in many technological contexts to incentivize research and development, it fares poorly when the market signals are weak. In the case of national cybersecurity innovations, their demand does not translate into commensurate market demand since there are few purchasers (other than government) who value the innovation and there is risk of govemment secrecy and eminent domain.