Patents encourage ALL innovation – both antisocial and prosocial – it’s impossible to filter in advance

Part III of this Article catalogued the manifold ways in which innovations can be bad for society. Even in the fields that have best exemplified technological progress, like pharmaceuticals, many new innovations are harmful. And the share of antisocial innovations will be even greater in other fields, like workplace surveillance, finance, and tobacco products. But none of this is apparent from two of our most important innovation governance tools—patent law and antitrust law. Both sets of doctrines treat all or almost all innovation as good innovation and worthy of encouragement.328

We refer to the uncritical embrace of innovation as the Inverse Precautionary Principle. The term derives from administrative law, where, according to the Precautionary Principle, the state should actively regulate behaviors that pose a risk of harm, even in the absence of empirical evidence of the risk.329 For example, the Precautionary Principle should be used as a guide for regulating environmental harms; according to the United Nations: “[w]here there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.”330 The guiding intuition is “better safe than sorry.” In the face of uncertainty about risks, the Precautionary Principle dictates, it’s best to regulate and avoid them.

To a considerable extent, major tools of innovation governance operate under the opposite intuition. In the absence of knowledge about the benefits and risks of an innovation, patent law and antitrust law assume the appropriate path is encouragement and promotion.331 Patent law ostensibly requires that an invention be “useful” in order to obtain exclusive rights.332 But in practice, the

utility requirement is toothless.333 Only truly “impossible” inventions like perpetual motion machines fail the requirement.334 Patents on bump stocks and tobacco additives are readily obtainable.335 This is the Inverse Precautionary Principle at work.

Consider the poster child for patent law as an innovation mechanism: pharmaceuticals. Here, the justifications for patent law exclusivity appear to be strongest, and the potential welfare benefits are potentially the highest.336 Of all the patented drugs, however, only a small percentage enter FDA clinical trials at all. Presumably the sponsors of the drugs that do not enter trials already know they are unlikely to succeed.337 Of the drugs that enter FDA trials, fewer than twenty percent ultimately win approval.338 For example, in 2019 the FDA approved only forty-eight drugs.339 And, as we described above, as many as half of the drugs that are

approved are no better or affirmatively worse than those that preceded them.340

While we’re all grateful for the drugs that cure diseases, extend lifespans, and improve health, we shouldn’t deceive ourselves into believing that most new patented pharmaceuticals are wonder drugs. They’re called wonder drugs for a reason. But that is not patent law’s approach. Although patent examiners may not know which drugs are going to turn into breakthroughs and which will be duds, patent law’s assumption is that they should all be encouraged. Where the Precautionary Principle dictates regulation in the face of uncertain risks, patent law’s Inverse Precautionary Principle offers incentives in the face of uncertain gains—and serious antisocial risks.