The Inequalities of Innovation

Article Source: Emory Law Journal, Vol. 72, pp. 1-88, 2022
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Gains from innovation and opportunities to innovate are not distributed equally. Sometimes, the patent system helps the poor become richer, but can also help the rich become richer.


Policy Relevance:

Patent reform could address inequalities associated with innovation.


Key Takeaways:
  • Gains from innovation are distributed unequally across geographic regions and demographic groups.
    • Over half of new patents are granted to the top one percent of patentees.
    • Five coastal states capture more than 50 percent of U.S. patents.
    • Only about 13 percent of inventors are women.
  • In considering innovation and inequality, three types of inequality matter; these include income inequality, the inequality of opportunities to innovate, and the inequality of access to the fruits of innovation.
  • Studies of first-time patentees shows that increases in patenting activity among this group are associated with greater economic mobility and less inequality; unknown inventors can use a patent as an economic asset to raise capital through loans, buyouts, or licensing deals.
  • The availability of patent rights can encourage patent owners to enter a market; the patent owner might charge a high price in one market to support a lower price in another market, a form of price discrimination that allows more consumers to access the innovation at a lower price.
  • The patent system can exacerbate inequality.
    • The availability of mentors and trusted connections means that gifted students from wealthy backgrounds are more likely to become inventors.
    • Unfair treatment of women, LatinX, and black inventors leads many to leave innovation-related fields.
    • Firms use strategic lawyering to discourage competitors and block competing inventions.
  • In using patent reform to address innovation inequalities, policymakers could focus on "win-win" situations, where a change in policy would not make any stakeholder worse off.
  • The patent office should help all applicants access technological tools to detect errors, draft patents, and identify weaknesses in patent applications.
  • A patent "small claims" court could reduce the burden on small entities to enforce patents or protect themselves against infringement claims.
  • Congress could create new services to support small and underrepresented inventors, such as an "Independent Office of the Small Inventor Advocate."
  • The United States Patent and Trademark Office (USPTO) should collect data to help policymakers address disparities and inequalities.
    • Some data suggests that the proportion of applications filed by new entrants is decreasing, and policymakers should investigate this.
    • The USPTO should ask whether an application is the applicant's first.
    • Policymakers should track whether federal funding of women-owned businesses and those located in disadvantaged areas allows small entities to file more patents.



Colleen Chien

About Colleen Chien

Colleen Chien is Professor of Law at Santa Clara University School of Law. Her areas of specialty include patents, empirical studies of intellectual property, international intellectual property, international trade, and technology and social justice. Professor Chien is nationally known for her research and publications on domestic and international patent law and policy issues.