I recently read “Patenting Nanotechnology” by law prof Mark Lemley. Excitement about (and fear of) nanotechnology seems to be waning rather than waxing. The article nonetheless includes a curiously paradoxical line of argument about intellectual property that I think is worth setting out in detail.
Presently there is some concern that there are already too many overlapping nanotechnology patents, and/or too many nanotechnology patents that cover basic research concepts as opposed to actual useful products. A number of observers have warned that these patents could interfere with ongoing nanotechnology research. This is a familiar theme over the past couple decades of patent scholarship.
Of course, patents (with all their warts) were around during the nineteenth and twentieth centuries, too, when a lot of important advances were made in technology. All kinds of things from sewing machines to radios were developed, and it all worked out okay in spite of much patent nonsense being involved.
Now, here is where Mark comes up with a twist on the familiar arguments. To help make his paper about nanotechnology more interesting, he seems to want to build up the case that nanotechnology is different from earlier technologies, so that the patent system might cause problems for nano that they did not cause for earlier technologies. So he goes through each earlier technology in some detail, and argues that in each case, in effect, for each of these key earlier technologies, patent protection was in effect non-existent. In the case of sewing machines, for example, the patents were tied up in litigation; in the case of radio, WWI intervened and the patents were taken over by the government.
Therefore, he argues, nanotechnology will be the first important technology that is in effect actually protected by patents. He goes on to conclude that there is no reason to worry about this yet. This conclusion seems sensible enough. So… what?
With his argument that previous key technologies were in effect devoid of patent protection as a practical measure, even though they were patented, well, he’s created a mythical monster, the worm who eats his own tail. I don’t think he fully realizes this, so I will play with the idea a little bit.
The argument is, in effect, that when a technology is tied up in patents to such an extent that no one has a clearly enforceable right to it… well, in effect, this is just the same as the technology’s having no patent protection at all. It’s a free-for-all.
If this is right, well, no need to worry about the anti-commons then, is there, not for nanotechnology nor for anything else. If the muddle with patents gets bad enough, well, everyone just ignores them, or stakes his own claim, or the whole business gets swept aside with compulsory licensing. On the other hand, if all these key technologies developed in a free-for-all, why bother with a patent system at all?
To which I say, hold on a minute! First, just because patents end up getting into a legal muddle after a technology is developed, does not mean that the incentive system that patents creates was not important to their initial creation. Investors are looking to the future, and if things don’t turn out as well as they expect, they’ll have to make the best of it. But that doesn’t mean that our ground rules can treat future expectations as irrelevant to investment.
Second, even if patents get tied up in litigation, well, is this the same thing as having no patent protection at all? In the case of sewing machines, yes, there was a lot of litigation. But there were a limited number of parties to that litigation, and ultimately it was all sorted out (Adam Mossoff’s paper on this offers details).
What I end up taking away from Mark’s paper is this:
--The problem of too many patents (or patents on the wrong sort of idea) is unlikely to emerge as a practical barrier to scientific or technological development for a wide variety of reasons.
--The problem of too many patents (or patents on the wrong sort of idea) is nonetheless worth thinking about, because systemic problems might affect whether investors are likely to see returns on their investment. Mind you, the effect is likely to be small, compared to other factors like entrepreneurial skill in producing and marketing a new idea.
--Too many patents might create a situation similar to the situation one would see with no patents at all, but the details matter. But accepting this idea without looking closely at the context could do quite a lot of mischief.
Mark, being tolerant, will forgive my wrenching his argument out of its context.