Since the founding of the United States, patents and protection of inventor rights has played a major role in American law. The Intellectual Property Clause was included in the United States Constitution when it was ratified by the United States in 1788. For centuries, the main purpose of patent law had been to encourage innovation. What happens, however, when patent laws and industry practices are unfair?
In a recent episode, Stanford Legal podcast, Lisa Larrimore Ouellette (Deane F. Johnson professor of law) sat with Richard Thompson Ford (George E. Osborne professor of law), and Pamela Karlan (Kenneth and Harle Montgomery professor of public interests law), to discuss inequality within the patent system. Ouellette wrote a paper titled Improving Equity in Patent Inventorship published in Science that focused on this topic. Ouellette is a Senior Research Fellow at Stanford Institute for Economic Policy Research. She holds a Ph.D. in Physics. This is an excerpt from the full interview. You can find it here.
Ford: Could you tell us something about the patent system in general? Many people don’t have any direct experience or knowledge of this engine of invention, yet it impacts us all on a daily basis.
It’s interesting to note that it is not clear if the patent system drives innovation. My students were surprised to learn that there’s no solid evidence to support the claim that stronger patents lead to higher research investment. There are many questions about what an ideal innovation system should look like. The U.S. patent system has been in place for decades and it is unlikely that the U.S. will abandon it. Patents, under the current system are a good measure of innovation. They also have many benefits, such as increased earnings and reputational and professional advantages that can accumulate throughout a career.
Karlan: How does a patent work?
Patents give an inventor the exclusive right to their invention for a set period of time. It is believed that having an exclusive right will allow you to charge more money for your invention.
All innovations can be patentable as long as they’re new. This includes software, pharmaceuticals and AI. The pharmaceutical system is one of the areas where the patent system has had the biggest impact because it can contribute to the current high prices of pharmaceuticals–there’s been a lot of policy debate over that.
Ford: In your paper, you focus on an issue that is very specific to the patent system. It involves inequity. What did you find?
Patent system is rife with inequities based on race, gender and income. At the present rate of progress, it will take more than 100 years for the U.S. to achieve gender parity. Black Americans are three times less likely to be inventors than white Americans. Geographic and income disparities are vast.
It’s surprisingly difficult to get accurate numbers for any of these stats because the Patent Office does not collect demographic data on inventors. The only information they have is the name and location of the inventor. When the Patent Office studied gender inequality within the patent system, it had to estimate based on name-gender predictive dictionaries. For example, if an inventor was named Lisa, the Patent Office would assume that the inventor is female. This is a flawed method that gets many things wrong, but it’s a good estimate if you are looking at millions of patents.
The problem of inequality in patents has been around for a very long time. Kara Swanson, a legal historian, has done some really interesting research on racism and gender bias in the early U.S. Patent System. She also explains how Black inventors or women would sometimes hide their identity with false patent applications to avoid being biased by the patent system.
Ford – Are women and people of colour inventing less or are they submitting fewer patents?
Both. Both the rate of patent applications and the loss of innovations at each stage of the innovation pipeline are lower. Women and minorities underrepresented in science and engineering are less represented than those with undergraduate degrees. They are also less likely to be the authors of scientific papers. This was something I saw first-hand, before I started law school. When I received my PhD in physics I was usually the only female in the room. I observed that my female colleagues dropped out of the PhD programs at a higher rate than their male counterparts.
The problem we are focusing on is the gap between innovators and inventors. Even when women and minorities are part of research teams, they are less likely to be named as inventors on patents. It has been shown that, when the same invention is both patented as well as published in a paper (a patent-paper pairing), the female and junior scientists who wrote the paper have a lower likelihood of being named on the patents.
Karlan: Is it because they are women or minorities? What is the mechanism?
This is an interesting question. We are trying to find out what role each of these things might play. There are at least two possible mechanisms. The first is just a matter of bias in who gets the credit for inventions. When it comes to deciding who gets on patents, there could be unconscious bias towards people lower down the hierarchy, such as women, minorities underrepresented, or junior scientist. Rosalind Franklin is a good example of a woman who was not given credit for her DNA work. There are other women throughout history that have been denied credit for their scientific contributions.
There’s a second explanation that I believe has received less attention and which we are trying to emphasize in this paper. The standards for being a paper writer differ from the standards of what it takes to be an inventor. The rules for a paper’s author are determined by scientific norms. Usually, anyone who has made an important contribution to a paper is eligible to be an author. Patent inventors are subject to different rules. Patent law has always favored the creation of an idea rather than the actual implementation. This is reflected in the patent inventorship rules. Patent inventorship is based on the standard that one must have contributed to an idea or what the patent law refers to as “conception” of the invention. If you did not contribute to conception you cannot be legally listed as an inventor. This means that many works that qualify as authorship do not qualify as inventorship.
Karlan: What’s the result if your name is on the patent but not the paper? What is the impact on your future as a person named in one document but not the patent?
It’s an excellent question. We don’t know enough about it, but studies show that patents can increase a person’s earnings over their lifetime, make them more valuable to a company, and encourage them to stay. Also, there are professional and reputational benefits. Also, it could affect your self-perception. You’re less likely than not to consider yourself an inventor if you don’t appear on patents. This could impact your ability to continue inventing.
Ford: This leads us to a comment that you made in the paper, that if women and racial minority people invented at the rate of high-income white males, the invention rate overall would quadruple. Can you elaborate on that?
This was the result of [Harvard economist] Raj Chetty’s group, which received much attention a few year ago. They overcame the lack-of-demographic-information problem by matching the patent office’s data with tax records and some school district records. They found some really interesting descriptive results. For example, the rate of innovation would quadruple for everyone inventing the same as white high-income men. This is a good example that it’s not just about equity. We are missing out on many new technologies because of disparities in patenting.
Karlan: Have you made any predictions about the type of innovation that would result? Are there any data that suggests the innovations will be in different fields or of a different type?
It’s been proven by a number of rigorous scientific studies that teams of all-female innovators are more likely than other teams to be focused on women’s issues. There is also anecdotal proof. In Silicon Valley you often hear of tech companies staffed primarily by white male inventors who are focused on the problems that young white men face. When you have a more diverse team of inventors, the problems they view as important to society can also change.
Ford: What do you suggest we do to address this problem? You suggested earlier that perhaps the patent system doesn’t actually drive innovation, so it might suggest that we stop granting patents. Another solution could be to try and increase the number patents these underrepresented groups receive.
Why women and minorities underrepresented in the patent system do not achieve the same success as other groups is unclear. It’s important for policymakers to think of ways that they can test this. The Patent Office, including Kathi Vidal as director who is very interested in improving equity in the Patent System, has been thinking about this.
The process of obtaining a patent currently isn’t very user-friendly. First-time inventors will receive a letter confirming that the patent office has received their invention. Then, they’ll be given a “rejection” or a “final rejection”, which is not very friendly. If you are new to the system, it may seem that they do not want you there. However, the majority of patent applications begin with a rejection. This usually starts a back-and-forth process where you will eventually receive a patent.
A study found that women are more likely than men to abandon their patent application after receiving these discouragement replies. Patent Office is looking at ways to deal with this. The Patent Office now sends applicants an official welcome letter instead of just a rejection and a confirmation. Recently, they conducted their first randomized test within the patent system to have a new group of patent examiners who’s role it is to deal applicants who aren’t represented by an lawyer. These examiners have received special training in how to deal effectively with pro se applicants. They found that the experimental examiner unit had completely eliminated the gender gap when it came to the success rate of applications in areas where women performed the worst, and for first-time applicants in the United States. It’s only a small number of inventors, those who do not have an attorney. But I find it encouraging that the office will experiment in this way.
Karlan: Could you speculate on AI a bit? If generative AI comes up with new ideas that are not yet patented but otherwise patentable, can those ideas be patented if they come from generative AI.
The Patent Office is currently struggling with this. In the spring, they held a listening session at Stanford to get the opinions of people from the community on whether AI should be considered an inventor, and how it should be recognized. The current rule states that a person must apply for a patent. AI is used by the applicant. A year ago I asked ChatGPT, without any instructions whatsoever, to create a patent claim that was not obvious. It created a claim that was not funny about a wireless technology. It would have taken a while for someone to understand why it wasn’t patentable.
This is a problem that I believe the Patent Office must address in the future. It will also exacerbate existing problems within the Patent Examination System as Patent Office becomes overwhelmed with patent claims, which are more easily generated with these tools.
Lisa Larrimore Ouellette, Deane F. Johnston Professor of Law and Senior Fellow at Stanford Institute for Economic Policy Research is Lisa Larrimore Ouellette. Her research focuses on empirical and theoretical issues in intellectual property law and innovation. She uses her physics training to examine policy issues, such as how scientists utilize the technical information contained in patents. She also explores how scientific expertise could improve patent examination. Professor Ouellette has also been recognized as a nationally recognized intellectual law expert and acclaimed teacher. She is the co-author of Patent Law: Problems, Cases and Materials, a free casebook on patent law.