Patents are for the wealthy
June 2022
Inventions and creative works are a point of pride in America, a pathway to the American Dream and an organic part of who we are as a Nation. The U.S. Constitution expressly provides for the protection of intellectual property — copyright and patents.
To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;1
So it is a power given to Congress embedded in our founding document and it is Congress who must decide how to draft laws to carry out this power. The Executive Branch develops regulations to implement the statute through the U.S. Patent and Trademark Office (USPTO) and then it is the Judicial Branch ( in particular the Federal Circuit for appeals) to resolve interpretations of these regulations and conflicts in patent cases.
This tripartite system has worked quite well since the first patent law was passed in 1790. By 1911, the first one million patents had been filed in the United States. Today, there are 11 million patents that have been filed with the US PTO in its history.2 The challenge of patenting new and emerging technologies has grown exponentially in the last one hundred years including entire new fields of technology like nanotechnology, software programs, biotechnologies and artificial intelligence. The Judicial Branch has been left to sort questions not expressly addressed in the law like can life be patented? The U.S. Supreme Court said “yes” (with rules) in Diamond v. Chakrabarty3 in 1980 when the Court allowed a genetically altered paramecium to be patented. Later another question arose: Can a part of human DNA be patented? To this, the U.S. Supreme Court said “no,” in Association for Molecular Pathology v. Myriad Genetics, Inc.4 in 2013. In that landmark case you could conclude the patent system is working, if you do not consider the millions of dollars spent to litigate the question of whether Myriad could exclude anyone else from using the known breast cancer genes (SNP) to do testing that only they could provide at exorbitant prices to patients who often did not have approval from their insurance companies to get the test. Ten years later, many women died waiting for the Myriad result, so how well is that really working?
The costly part of filing and the costly part of litigating infringers and defending against attackers is all because so much money is at stake. Myriad stood to lose millions of dollars if they lost their patent on the breast cancer gene test. It was what they were guaranteed in our patent system, afterall — an exclusive right to their invention for a period of time, to commercialize and maximize profit for their corporation. They overreached and their gamble paid off — they were able to profit by this patent for ten years before it could be revoked. Our patent system has created this perverse incentive by using the inefficiencies of the slow grinding wheels of justice, which gives those who overreach the advantage. The years of litigation result in lost time for innovating, and if the invention could mean life or death (as in Myriad), potential users of the invention or innovations from others suffer from a system that was meant to ultimately benefit the public.
On the other hand, the federal copyright law is fairly accessible for anyone to file their own copyright on the government website, with a nominal fee.5 Myriad was an exceptionally complex case, yet all of patent law has become so complex that it is difficult for an inventor to protect their invention without a retainer of $60,000 to a patent firm, mostly located in the Washington, DC area. Inventors who can navigate the “prior art” to list other patents that are similar or show how they differ are at an advantage and can save some billable time. It is fairly easy for an inventor to file the short form provisional patent with a fee (about $1000) that will give you protection for one year, but you have to be ready to begin a full patent application at the end of that year or you lose the protection in the future for patenting.
Even if you retain a patent law firm, it often takes years to work through the arcane processes of the patent office. These processes are what make up most of the questions on the patent bar that anyone who practices in patent law, must take and pass. So this tells you a lot about how important understanding and navigating “process” is for registering a patent. That may take several rounds of questions and rejections from the patent examiner, which can take place over months and years. If you eventually get a patent issued, then you must maintain it and pay a maintenance fee. No one is going to protect your interests except yourself to a large degree, so you have to police your industry to make sure no one appears to be using your patent. Or more often, infringement claims may come from insiders who disclose their company is infringing. This is a full time job, itself. It may require more lawyers.
Even if you succeed in seeing your patent issued and you own it, 97% of patents are not profitable enough to protect.6 This further jeopardizes those without the resources to try again (an inevitable part of entrepreneural life), and favors those with deep pockets.
If the right to protect your intellectual property has become cost prohibitive, then is it really working to inequitably limit freedom of expression? The Clause does not say only wealthy land owners have the exclusive right to protect their inventions.
Studies of patents show how Jim Crow laws of the south impacted the difference in patent ownership in the north compared to the south among African-Americans.7 Native American Tribal Nations have recognized the problems and presented a sanctuary for patent reviews through sovereign immunity to the reviews of a new board meant to provide a forum for patent trolls conflict resolution.8 In addition, western patent law has not effectively provided protection to Traditional Knowledge, the kind of inventions and creative work that Native Americans and Tribal Nations need to protect.9 Women, people of color, Native Americans, slaves and people in other forms of servitude did not enjoy the full rights of the U.S. Constitution, when the intellectual property Clause was written, but progress has been made, but slow to address senseless inequities. Just looking at those who represent applicants before the USPTO, as of 2020, only 6.5% of registrants (lawyers and agents) are racially diverse. Women did not even appear in the data until around 1980.10
Inequalities between income levels is striking for those who get patents. The Brookings Institute published this graph of the likelihood of patenting by age 30 for inventors per 1000. It shows at least a five fold difference in the probability of patenting in the upper income group compared to the lowest income group. 11
Another author suggests that the patent system has created a barrier to upward mobility because of the increasing protections for patents and copyrights.12 Being an author or an inventor is part of the story of the pathway to the American Dream, but now the patent system has made it increasingly a barrier and in fact, exacerbates a class system where it is many times easier for upper income families to get patents. When only wealthy families can get patents, it then contributes to generational wealth for the wealthy, further snowballing the inequities.
Stifling inventions and creative works is an unintended consequence of a brilliantly designed tripartite system of laws whose effect has been to eventually become too complex and onerous with increasing protections for patent holders. The unintended consequences are that instead of “promot [ing]” inventing, as the drafters of the U.S. Constitution wrote in Article One, Section Eight, the process has become a barrier to entry and stifling creativity and invention. Not a very American thing to do.
In 2019 and 2021, the IDEA Act 13 was introduced that would require the USPTO to collect demographic data on the applicants. It has not left the Committee on the Judiciary in the House this term and will die at the end of this session, too. Without data to assess the disparities, it will be more difficult to demonstrate action is needed.
Patent law needs a new critical view to making patent ownership more accessible to everyone, and dissolve the class system this has created for inventors. The copyright filing system might be a good model to start thinking about this, and new legislation called something like the “Patent Reform Act of 2023” would be a good place to start.
The importance of inventions will not go away, but evolving forms of private resolution will likely take the place of onerous democratic processes, and that may not be a good thing for democracy. I see three trends that move us away from the promise of a patent system for all. First, litigation in general is decreasing because it is expensive and time consuming. Arbitration is generally less expensive and can be used to resolve patent disputes but the results are private, depriving the democratic system of governance from responding to these developments. Second, emerging groups of inventors are shunning the patent system all together and for the last ten years high school and university participants have relied on a databank14 of ideas for genetic engineering competitions where all new inventions are free for use, and no one can patent them and exclude others, in order to not slow progress in genetic engineering. Third, entrepreneurs are increasingly advised by business consultants not to use the patent process, and where possible use “trade secrets”, a way of protecting your invention by taking certain steps to keep it secret under state law. These mechanisms are signals that the future for patent law is changing from the ground up, rather than with the leadership of Congress, and that may be the way the patent system is ultimately reformed.
None of this should be construed as legal advice.
U.S. Const., Art. 1, Sec. 8, Cl. 8
https://www.uspto.gov/patents/milestones
Diamond v. Chakrabarty, 447 U.S. 303 (1980).
Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013)
https://www.copyright.gov/registration/
https://www.forbes.com/sites/stephenkey/2017/11/13/in-todays-market-do-patents-even-matter/?sh=1252a18756f3
Cook, Lisa D. 2014. "Violence and economic activity: evidence from African American patents, 1870–1940." Journal of Economic Growth 19 (2): 221-257.
https://www.ipwatchdog.com/2017/10/09/native-americans-set-save-patent-system/id=88871/
https://scholarlycommons.law.case.edu/cgi/viewcontent.cgi?article=2249&context=jil
https://www.americanbar.org/groups/intellectual_property_law/publications/landslide/2020-21/september-october/diversity-patent-law-data-analysis-diversity-patent-practice-technology-background-region/
https://www.brookings.edu/blog/social-mobility-memos/2017/12/04/inventions-and-inequality-class-gaps-in-patenting/
Brink Lindsey and Steven Teles, The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth and Increase Inequality
https://www.congress.gov/116/bills/s2281/BILLS-116s2281is.pdf
https://parts.igem.org/Help:An_Introduction_to_BioBricks