It’s a perfect middle ground.

The patent system protects a wide array of technologies—everything from microbial fuel cells and radiolabeled pharmaceuticals to interactive cat toys and utensil holders for dishwashers.1 One of the defining characteristics of the current patent system is that it applies a uniform set of rules to all inventions, and it does not discriminate based on technology or industry. This uniformity is also one of the most problematic aspects of the patent system. There is overwhelming evidence that the system’s costs and benefits vary greatly across industries.2 Patents are critical for stimulating innovation in some industries, but they arguably stifle innovation in others. The government knowingly overlooks these differences when it awards patent rights on inventions. The justification for this oversight is not that a uniform patent system is optimal but rather that we do not have enough information about inventions to create an administrable system for tailoring patent awards that would benefit the public. This Article identifies the basis for such a system—inventions’ time-to-market. Certain types of inventions take much longer to develop than others, and a lengthier time-to-market strongly correlates with an increased need for patent protection and a lower risk that patents will stifle subsequent innovation. The government can use this relatively observable feature of inventions as the foundation for an objective and reasonably accurate system of tailored patent awards.

Scholars and policymakers have long recognized that our current patent laws cannot provide the optimal incentives for innovation.3 Patents are essential for motivating investment in research and development (R&D) in some circum- stances,4 but they also limit the public’s access to inventions through monopoly pricing. Given patents’ social costs, firms should receive the least amount of patent protection necessary to incentivize the research, development, and commercialization of their inventions. Though different amounts of patent protection are necessary to incentivize different inventions, the patent system largely ignores these differences.5 The government allows firms to patent almost any invention qualifying as useful, novel, and nonobvious,6 regardless of its R&D costs and most of the other economically relevant factors.7 After a patent is issued, it primarily operates as a one-size-fits-all reward for innovation, offering all patentees the same set of legal entitlements8 and the same twenty-year term of protection.9 This system inevitably provides excessive monopoly protection for a great many inventions, while also offering insufficient incentives for the development of others.10

It is now clear that the social costs of our one-size-fits-all patent system are much greater than was once imagined. The classic economic analysis of patents uses a stand-alone model of innovation, in which patent policy is largely defined by the tradeoff between increased innovation from stronger monopoly rights and the consumer deadweight loss from monopoly pricing. The more recent economic models recognize that innovation is a cumulative and additive phenomenon.11 Researchers are constantly building on one another’s inventions, and each step forward in technology generates knowledge spillovers that facilitate further technological advances.12 In such a cumulative environment the patent system not only restricts public access to inventions through monopoly pricing, it may actually impede future technological progress by making it harder for other firms to build on earlier discoveries.13 Conversely, when the patent system fails to call forth a new invention by offering too little protection, the public loses not just that one invention but also all future advances that would have come from it. It is thus critical to both provide enough patent protection to motivate innovation and to avoid providing so much protection that it stifles innovation.

Nevertheless, the patent system continues to operate under uniform patent laws that mostly provide a one-size-fits-all reward for innovation. The patent system’s failure to tailor patent awards adequately based on inventions’ need for protection and the risk of stifling subsequent innovation is the central problem in patent policy. Indeed, it is possible the patent system’s overall effect on innovation is negative because it fails to tailor its patent awards properly.14 Constructing reliable empirical studies to measure the patent system’s net impact on innovation is difficult.15 But the available evidence suggests that the system’s innovation stifling effects are substantial in some fields, and might even outweigh the system’s innovation-promoting effects.16

The problems associated with patent law’s uniformity are not new, but they have grown worse over time.17 The basic structure of modern patent law arose in the eighteenth and early-nineteenth centuries, when most innovation was mechanical in nature.18 The advances in science, engineering, and business practices since then have continually created new technologies and industries with increas- ingly divergent economic and technological characteristics. This ever-expanding set of technologies puts increasing strain on the uniform patent laws and the onesize-fits-all reward. The U.S. Congress occasionally passes broader patent reforms in response to more widespread industry complaints about the system,19 but since these reforms generally apply equally to all patentable inventions, they often create their own set of problems.20 Patent scholars often look for reforms that will correct problems in some industries without aggravating the patent system’s shortcomings in others. But when every invention is subject to the same set of rules, these reforms are hard to find.