In four patentable subject matter cases in the past five Terms, the Supreme Court has reaffirmed the judicially created prohibitions on patenting “abstract ideas” and “nature,” but the boundaries of these exceptions remain highly contested. The dominant justification for these limitations is utilitarian: courts create exemptions in areas where patents are more likely to thwart innovation than to promote it. The resulting debates thus focus on whether patents are needed to provide adequate innovation incentives in disputed fields such as software or genetic research, or whether private incentives such as reputational gains, first-mover advantages, or competitive pressures are sufficient. These debates frequently overlook a significant fact: the absence of patents does not imply that there would be only private incentives. Rather, federal and state governments facilitate financial transfers to researchers through a host of mechanisms—including tax incentives, direct grants and contracts, prizes, and regulatory exclusivity—which already provide substantial research support in the fields where patents are the most controversial.
Paying attention to non-patent incentives could prevent courts from being misled by the concern that a lack of patents for a certain type of invention would remove all incentives for nonobvious and valuable research in that field. Non-patent innovation incentives could also help ease the tension between utilitarian and moral considerations in the current patentable subject matter debates: if many people find patents on certain inventions (such as “human genes”) morally objectionable, utilitarian goals can still be served by using other transfer mechanisms to substitute for the incentive provided by patents. Indeed, non-patent incentives may be more effective than patents in contested areas, where inventors who share moral objections find little incentive in patents, and those who do not still find the patent incentive to be dulled by the persistent uncertainty that has plagued patentable subject matter doctrine in recent years. Wider appreciation of the range of innovation incentives would help bring patentable subject matter discussions in line with the realities of scientific research, and might even make this doctrinal morass more tractable.