Patent as Promise

<div> For patent law to serve its purpose of encouraging innovation, would-be inventors must believe that the government will honor its promise to protect their right to exclude others from selling or using their novel, nonobvious, and useful inventions. But what makes the government’s commitment to patent protection credible? Put another way, why is the government’s “patent promise” anything more than cheap talk? </div> <div> <br> </div> <div> The puzzle of credible commitment in patent law is just that: a puzzle. Once an inventor has disclosed her discovery to the public, government officials—even benevolent government officials with society’s best interests in mind—face powerful incentives to renege on their promise to protect the inventor’s right to exclude. After all, the primary benefit of patent law is to incentivize innovations that occur prior to the patent’s grant; a patent—once issued—generates deadweight loss in service of a goal already achieved. The patent promise is thus fundamentally time-inconsistent. And indeed, the long history of patent law reveals several instances in which governments—even in wealthy, liberal, democratic, and otherwise-stable societies—have cancelled large numbers of already-granted patents without triggering serious reputational sanctions. If the patent promise is credible, it is not because patent law’s track record is impeccable. </div> <div> <br> </div> <div> Although credible commitment is central to the patent system’s operation, the subject has been relegated to the periphery of the patent literature. Leading patent scholars—to the extent that they address the problem of credible commitment at all—tend to assume that it has been solved without explaining how. The result is a credibility gap in patent scholarship that mirrors the credibility gap in the law itself: without an account of why the patent promise is believable, a cloud of doubt hangs over claims regarding patent law’s innovation incentive effects. </div> <div> <br> </div> <div> This article seeks to narrow—though not entirely close—the credibility gap in patent scholarship by building a ground-up account of credible commitment in patent law. It emphasizes three constellations of variables—institutions, ideas, and innovation—that undergird, or in some cases undermine, patent law’s promise of protection. The tripartite institutions/ideas/innovation framework leads to several novel, nonobvious, and hopefully useful analytical insights. For example, the patent promise derives support both from institutional transparency and nontransparency: transparency with respect to judicial decisionmaking and nontransparency with respect to funding mechanisms. Nonwelfarist justifications for patent law—such as the natural rights account—serve to sustain potentially welfare-enhancing policy trajectories even when welfarism on its own cannot. Perhaps most importantly, measures that lengthen and strengthen patent protection may weaken patent law’s innovation incentive when those measures undermine the credibility of the patent promise. These insights bear important implications not only for patent law and policy but for other areas across and beyond intellectual property that face fundamental time-inconsistency challenges of their own.&nbsp; </div> <div> <br> </div>