Has the Academy Led Patent Law Astray?

Posted by Social Science Research Network

Has the Academy Led Patent Law Astray?

Jonathan Barnett (USC Gould School of Law)

Abstract:     Scholarly commentary widely asserts that technology markets suffer from a triplet of adverse effects arising from the strong patent regime associated with the establishment of the Court of Appeals for the Federal Circuit in 1982: “patent thickets” that burden innovation with transaction and litigation costs; “patent holdup” resulting in excessive payouts to opportunistic patent holders; and “royalty stacking” resulting in exorbitant patent licensing fees. Together these effects purportedly depress innovation and inflate prices for end-users. These repeated assertions are inconsistent with the continuing robust output, declining prices and rapid innovation observed in the most patent-intensive technology markets during the more than three decades that have elapsed since 1982. Recent empirical studies relating to each of these assertions have found little to no supporting evidence over a variety of markets and periods. Nonetheless courts, antitrust agencies and legislators have taken, or have proposed taking, actions consistent with these assertions. Most importantly, policymaking entities have sought to mitigate thickets, holdup and stacking effects by limiting injunctive relief for important segments of the patentee population and placing significant constraints on damages awards. Substituting monetary relief for injunctive

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