Race and Gender in the USPTO: Schuster’s Hard Data for Hard Issues

[I asked some of my RAs to write guest posts this summer, lightly edited by me.  This one is by Jennifer Black, a 3L at Villanova University Charles Widger School of Law]

Intellectual property rights are just that: rights.

Much like other rights, however, they have been unequally granted to people based on factors outside of their control throughout our country’s history. Intellectual property is a means for upward mobility of individuals who, through their own ingenuity, creativity, or otherwise, contribute something of value to our society. It is this exchange of benefits that the patent system is built upon. However, when certain individuals are less likely to reap the rewards of their inventions, they are both disincentivized from creating as well as from engaging with the patent system. Although the extent of these biases is yet unknown, research regarding the subject has been conducted with the intent of identifying and remedying inequity.

The scope of this inequity is difficult to comprehend except by collecting, analyzing, and comprehending the data. Mike Schuster and his coauthors did just that in his article, An Empirical Study of Patent Grant Rates as a Function of Race and Gender (published version in the American Business Law Journal), which examines the patent granting rates as a function of inventors’ races and genders. As scientists and engineers, patent practitioners and examiners will undoubtedly appreciate the amount and quality of his data.

Making Sense of Unequal Returns to Copyright

Typically, describing an article as polarizing refers to two different groups having very different views of an article. But I read an article this week that had a polarizing effect within myself. Indeed, it took me so long to get my thoughts together, I couldn't even get a post up last week. That article is Glynn Lunney's draft Copyright's L Curve Problem, which is now on SSRN. The article is a study of user distribution on the video game platform Steam, and the results are really interesting.

The part that has me torn is the takeaway. I agree with Prof. Lunney's view that copyright need not be extended, and that current protection (especially duration) is overkill for what is needed in the industry. I disagree with his view that you could probably dial back copyright protection all the way with little welfare loss. And I'm scratching my head over whether the data in his paper actually supports one argument or the other. Here's the abstract:

No one ever argues for copyright on the grounds that superstar artists and authors need more money, but what if that is all, or mostly all, that copyright does? This article presents newly available data on the distribution of players across the PC videogame market. This data reveals an L-shaped distribution of demand. A relative handful of games are extremely popular. The vast majority are not. In the face of an L curve, copyright overpays superstars, but does very little for the average author and for works at the margins of profitability. This makes copyright difficult to justify on either efficiency or fairness grounds. To remedy this, I propose two approaches. First, we should incorporate cost recoupment into the fourth fair use factor. Once a work has recouped its costs, any further use, whether for follow-on creativity or mere duplication, would be fair and non-infringing. Through such an interpretation of fair use, copyright would ensure every socially valuable work a reasonable opportunity to recoup its costs without lavishing socially costly excess incentives on the most popular. Second and alternatively, Congress can make copyright short, narrow, and relatively ineffective at preventing unauthorized copying. If we refuse to use fair use or other doctrines to tailor copyright’s protection on a work-by-work basis and insist that copyright provide generally uniform protection, then efficiency and fairness both require that that uniform protection be far shorter, much narrower, and generally less effective than it presently is.

The paper is really an extension of Prof. Lunney's book, Copyright's Excess, which is a good read even if you disagree with it. As Chris Sprigman's JOTWELL review noted, you either buy in to his methodology or you don't. I discuss below why I'm a bit troubled.

Maggie Chon on IP and Critical Theories

I tend to approach IP law primarily through a law-and-economics lens, but I enjoy learning about how scholars with different methodological toolkits tackle the same subject matter—especially when their work is clear and accessible. I was thus delighted to see a draft chapter by Margaret Chon, IP and Critical Methods, for the forthcoming Handbook on Intellectual Property Research (edited by Irene Calboli and Lillà Montagnani). Chon provides a concise review of critical legal theory and its application to IP law.

According to Chon, critical theory includes a critique of liberal legal theory as based on the fallacy that legal institutions fairly reflect constituents' interests (as reflected in the marketplace or ballot box). Instead, the interests of privileged or empowered social groups are over-represented, and institutions contribute to these inequalities to the extent that enduring change requires reimagining these institutions themselves. Of course, as she notes, "critical theory would not exist without some belief (however thin) that law and legal systems contain some of the tools necessary for structural transformation."

Chon argues that one need not be a self-identified Crit to engage in critical methodology, and that many IP scholars have stepped closer to critical method by moving from doctrinal to structural analysis, and by "perform[ing] this structural analysis with attention to power disparities." And she gives a number of examples of the influence of critical theory across different areas of IP.

Crowdsourced Bibliography on IP and Distributive Justice

Professor Estelle Derclaye recently sparked a terrific email thread among IP professors about articles tackling IP from a distributive justice perspective. Here is a lightly edited list of the suggested works, roughly in chronological order, with links (open access, where possible) and, for somewhat arbitrarily selected works, short quotations or descriptions. If you have additions or corrections, feel free to email me or add them to the comments.

Nature Versus Nurture in the Propensity to Innovate

A colleague pointed me to a paper today that I wanted to share. NBER researchers have managed to tie patent inventor data to tax returns to test scores in order to show who is likely to be an inventor on a patent. The study makes some intuitive and nonintuitive findings. The paper, by Alexander M. Bell (Harvard Econ), Raj Chetty (Stanford Econ), Xavier Jaravel (LSE), Neviana Petkova (U.S. Treasury), and John Van Reenen (MIT Econ), is here:

We characterize the factors that determine who becomes an inventor in America by using de-identified data on 1.2 million inventors from patent records linked to tax records. We establish three sets of results. First, children from high-income (top 1%) families are ten times as likely to become inventors as those from below-median income families. There are similarly large gaps by race and gender. Differences in innate ability, as measured by test scores in early childhood, explain relatively little of these gaps. Second, exposure to innovation during childhood has significant causal effects on children's propensities to become inventors. Growing up in a neighborhood or family with a high innovation rate in a specific technology class leads to a higher probability of patenting in exactly the same technology class. These exposure effects are gender-specific: girls are more likely to become inventors in a particular technology class if they grow up in an area with more female inventors in that technology class. Third, the financial returns to inventions are extremely skewed and highly correlated with their scientific impact, as measured by citations. Consistent with the importance of exposure effects and contrary to standard models of career selection, women and disadvantaged youth are as under-represented among high-impact inventors as they are among inventors as a whole. We develop a simple model of inventors' careers that matches these empirical results. The model implies that increasing exposure to innovation in childhood may have larger impacts on innovation than increasing the financial incentives to innovate, for instance by cutting tax rates. In particular, there are many “lost Einsteins” — individuals who would have had highly impactful inventions had they been exposed to innovation.

The finding that inventors are white males that come from higher income families is hardly surprising, and one might imagine a variety of reasons: access to education, access to capital, risk aversion, discrimination, etc. But the interesting part of this paper, as I discuss below, is that the authors believe they can causally show it is not really any of the usual suspects, at least not directly.

Larry Helfer on Access to Medicines

Readers interested in the social justice concerns described in Monday's post may be interested in a book chapter that was recently posted by Professor Laurence Helfer: Pharmaceutical Patents and the Human Right to Health: The Contested Evolution of the Transnational Legal Order on Access to Medicines. Helfer is one of the leading scholars of international IP institutions; see, e.g., his classic work on regime shifting.

In this new chapter, he describes the collision of two "transnational legal orders" (TLOs): one focused on IP, and one on the right to health. He breaks down the history into three phases. In Phase 1 (pre-mid-1990s) the two TLOs "existed in relatively stable but distinct policy spaces." In Phase 2 (mid-1990s to 2000), the IP TLO rapidly expanded. Phase 3 (2000 to the present) has involved "a backlash against pharmaceutical patents and a campaign by developing countries and civil society groups to increase A2M [access to medicines]." In broad strokes, this account is probably familiar to many IP scholars, but for those interested in the detailed institutional dynamics behind this story, Helfer's chapter is well worth a read.

In related news, the pharmaceutical firm GlaxoSmithKline made headlines with its recent announcement that it will stop filing patents in 50 low-income countries and will grant licenses to generics manufacturers in another 35 lower-middle-income countries.

Peter Menell on IP and Social Justice

Professor Peter Menell recently posted a new essay, Property, Intellectual Property, and Social Justice: Mapping the Next Frontier, from a conference celebrating Professor Joseph Singer. As he explains, "[t]he ascendency of intangible resources profoundly affects social justice—from access to life-saving genetic information to the control of knowledge dissemination, creative freedom, group identity, and, increasingly, the distribution of wealth." His essay canvases a huge array of topics in just 52 pages, and it is a great review of the literature in this area. (The essay is worth downloading even just for the collection of key works in footnote 13, from scholars including Anupam Chander and Madhavi Sunder and Amy Kapczynski.)

For each of the four main bodies of IP law, Menell examines the law's internal legitimacy (is IP the best way of achieving the law's goals?) and external effects (how does the law affect various social justice considerations?). For example, he compares patent law with the other legal institutions that Daniel Hemel and I discuss in Beyond the Patents–Prizes Debate, and he reaches the same conclusion we do: each institution has limitations, and "the patent system works best in conjunction with other institutions." On patent law's external effects, Menell notes the troubling implications of patent law's use of price as an allocation mechanism for certain technologies such as medicines. He notes that this does not require one to reject the patent system—rather, it highlights the need in certain areas for non-patent institutions such as government health care policies. (Of course, as Ted Sichelman nicely summarizes, we think the negative distributional effect of patents will be replicated by any system that taxes users of the technology—marginal cost pricing can only be obtained by requiring consumers to broadly subsidize each other's technology use, which is the whole idea of government health care and other health insurance programs.)