Maturing Patent Theory from Industrial Policy to Intellectual Property

32 Pages Posted: 23 Oct 2012

See all articles by Oskar Liivak

Oskar Liivak

Cornell University - Law School

Date Written: April 23, 2012


We have always known that technological progress is important and this country has always aimed to promote it. A large part of that responsibility has fallen on the shoulders of the patent system. Embarrassingly, despite over two hundred years of experience, we still do not actually know if the patent system helps or hinders technological progress. This Essay argues that the problem is not the patent system but rather patent theory. Patent theory suffers from three linked problems: exceptionalness, indeterminacy, and animosity. First, patent law is seen as a necessarily unique exception to the overall market economy. By artificially making patenting a profitable activity, the patent system is a form of industrial policy that aims to encourage people to enter the risky business of inventing. Second, we have never confidently been able to conclude that the benefits of this industrial policy outweigh its costs. Third, and perhaps just as important, that story inherently creates animosity among important interest groups. The resulting ongoing indeterminacy and animosity have prevented the patent system from maturing into an accepted, stable legal institution.

We can and must do better. We need an institution that is stable, reliable, and accepted. This Essay argues that we should reject the long-standing “legal incentive” narrative and begin looking for a better alternative. This Essay points toward an accepted, stable model sitting in plain sight: traditional property. We have (incorrectly) thought that traditional property and its economic system for exchange cannot provide guidance for the exotic nonrival world of the patent system. This Essay aims to show that those assumptions are wrong, and it begins outlining a patent narrative where patents are seen as an important and natural extension of traditional property and indeed the overall economy of tangible goods. There are good reasons to think that such a system might provide what current patent theory cannot: the basis for a determinate and accepted patent system.

Keywords: Intellectual Property, Patents, Property

Suggested Citation

Liivak, Oskar, Maturing Patent Theory from Industrial Policy to Intellectual Property (April 23, 2012). Tulane Law Review, Vol. 86, No. 5, 2012, Available at SSRN:

Oskar Liivak (Contact Author)

Cornell University - Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States
607-255-1715 (Phone)

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