The Myth of the Sole Inventor
The theory of patent law is based on the idea that a lone genius can solve problems that stump the experts, and that the lone genius will do so only if properly incented. We deny patents on inventions that are “obvious” to ordinarily innovative scientists in the field. Our goal is to encourage extraordinary inventions – those that we wouldn’t expect to get without the incentive of a patent.
The canonical story of the lone genius inventor is largely a myth. Edison didn’t invent the light bulb; he found a bamboo fiber that worked better as a filament in the light bulb developed by Sawyer and Man, who in turn built on lighting work done by others. Bell filed for his telephone patent on the very same day as an independent inventor, Elisha Gray; the case ultimately went to the U.S. Supreme Court, which filled an entire volume of U.S. Reports resolving the question of whether Bell could have a patent despite the fact that he hadn’t actually gotten the invention to work at the time he filed. The Wright Brothers were the first to fly at Kitty Hawk, but their plane didn’t work very well, and was quickly surpassed by aircraft built by Glenn Curtis and others – planes that the Wrights delayed by over a decade with patent lawsuits.
The point can be made more general: surveys of hundreds of significant new technologies show that almost all of them are invented simultaneously or nearly simultaneously by two or more teams working independently of each other. Invention appears in significant part to be a social, not an individual, phenomenon. Inventors build on the work of those who came before, and new ideas are often “in the air,” or result from changes in market demand or the availability of new or cheaper starting materials. And in the few circumstances where that is not true – where inventions truly are “singletons” – it is often because of an accident or error in the experiment rather than a conscious effort to invent.
The result is a real problem for classic theories of patent law. If we are supposed to be encouraging only inventions that others in the field couldn’t have made, we should be paying a lot more attention than we currently do to simultaneous invention. We should issuing very few patents – surely not the 200,000 per year we do today. And we should be denying patents on the vast majority of the most important inventions, since most seem to involve near-simultaneous invention. Put simply, our dominant theory of patent law doesn’t seem to explain the way we actually implement that law.
Maybe the problem is not with our current patent law, but with our current patent theory. But the dominant alternative theories of patent law don’t do much better. Prospect theory – under which we give patents early to one company so it can control research and development – makes little sense in a world in which ideas are in the air, likely to be happened upon by numerous inventors at about the same time. And commercialization theory, which hypothesizes that we grant patents in order to encourage not invention but product development, seems to founder on a related historical fact: most first inventors turn out to be lousy commercializers who end up delaying implementation of the invention by exercising their rights.
If patent law in its current form can be saved, we need an alternative justification for granting patents even in circumstances of near-simultaneous invention. In my forthcoming article in the Michigan Law Review I consider two other possibilities. First, patent rights encourage patent races, and that might actually be a good thing. Second, patents might facilitate markets for technology. Both have some logic to them, but neither fully justifies patent law in its current form.
While patents don‘t seem to be encouraging the development of discrete new ideas that no one else has, that doesn‘t mean they aren‘t motivating innovation at all. Rather, it means that the simple incentive-to-invent story must be complicated by the presence of competitors working to achieve the same invention at roughly the same time. Granting a patent to the first to achieve that goal doesn‘t just encourage one entrant; it may have a more complex set of incentives on different participants depending on how they perceive themselves relative to their competitors. The incentives provided by a patent, in other words, must be filtered through the realities of a patent race.
Racing theory may or may not be the answer we are looking for; there is some reason to think that there is no one unified theory that explains all of patent law. But at a minimum, it is a partial explanation for how patents might fit into the innovation puzzle, one based on evidence about how patents seem to work in the real world. And even a partial explanation is better than what we have right now.
About the Author
Mark Lemley is the William H. Neukom Professor of Law at Stanford Law School, the Director of the Stanford Program in Law, Science and Technology, and the Director of Stanford's LLM Program in Law, Science and Technology. He teaches intellectual property, computer and Internet law, patent law, and antitrust. He is the author of seven books and well over 100 articles (and counting) on these and related subjects, including the two-volume treatise IP and Antitrust. Professor Lemley is also a founding partner in Durie Tangri, a law firm specializing in high-tech and intellectual property matters, located in San Francisco, California.As presented in IP Watchdog: http://ipwatchdog.com/2011/09/11/the-myth-of-the-sole-inventor/id=19090/
One of Prof Lemley’s key errors (in a very target rich environment) is to suggest that there’s only one goal of the patent system, and that “encouraging only inventions that others in the field couldn’t have made” is that sole goal. An even bigger goal, at least in economic effect, is to encourage investment in development of new ideas, to promote progress of the useful arts by translating ideas into useful products. An invention as a naked idea has no social value until it is translated into a useful product. But that translation is often very costly and risky. The “first unit sold” of a new invention often has very high fixed costs, including, for example, sorting out which chemical species out of a family has the best balance of safety, effectiveness, and manufacturability, getting the bugs worked out, finding the best compromise and tradeoff between manufacturability, product function, and aesthetics, and—often most costly—marketing and educating purchasers of the value of the invention. Once the first inventor to market bears those costs, it is often relatively inexpensive for a second market entrant to come in with a “knock off.” Because the second entrant does not bear the same risk or high fixed costs, often it can under-price the first entrant.
To translate this into basic economics, the knowledge that an inventor develops to translate an idea into an invention is an economic externality when it is disclosed to the public. The patent system permits the inventor to internalize that externality, to capture the value of the knowledge he developed. Like any other positive externality, unless there is some effective way to internalize the externality, the economy as a whole will sustain underinvestment. The intellectual property system is the most effective way (the only effective one?) that any society has ever developed to accomplish internalization of information externalities. And it does it quite effectively. Though hard data are hard to come by, the uniform view of venture capital, entrepreneur management, and the like is that the biggest economic effect of the patent system is to facilitate capital flows. Because the patent system provides limited exclusion from competitors, investors can invest in those “first unit” fixed costs, and recover those fixed costs, with some protection against competitive price erosion.
Because Lemley’s thesis leads him to conclude that “we should be denying patents on the vast majority of the most important inventions” (Lemley 2011, p5), he rejects the economic necessity for internalizing the externalities associated with inventors’ contributions to the public. Therefore, Lemley’s statement on page 5 consigns the rest of his paper to economic irrelevance.