The Inequalities of Innovation

Abstract

Over the last few decades, the United States has become more innovative, but the gains have been distributed unequally. In 2020, over 50% of new U.S. patents went to the top 1% of patentees and more than 50% of all patents of U.S. origin were generated by just five states, all coastal. Less than 13% of inventors were women. The economic, geographic, and demographic concentration of innovation highlight how the intersections between two traditionally discrete topics—innovation and inequality—have become increasingly relevant. But rather than any single inequality, this Article argues, multiple inequalities - of income, opportunity, and access – have relevance to innovation. Examining the inequalities, separately and together, exposes the tensions, at times surprising, between notions of equity. When mapped onto patent law, an inequalities framework also reveals how the patent law can exacerbate inequality – by providing enhanced returns to “invention capital” – the exposure, trust, resources, know-how, and network of people that “you know and can call upon” – required to take advantage of inventing. But an inequalities framework also shows how patented innovation can improve conditions for the worst off, by providing paths to prosperity and hastening the creation and diffusion of innovation, even as it makes the rich richer.

Innovation, in turn, can offer something different to the inequality debate: a focus on abundance, rather than scarcity. In addition to an “inequalities” framework for understanding inequality and innovation, this Article offers a set of legal and administrative proposals grounded in patent law for addressing inequality concerns. To increase opportunity, this Article proposes the creation of an Independent Office of the Small Inventor Advocate, akin to the National Taxpayer Advocate, that would have responsibility for increasing invention capital and know-how among first-time inventors, and leveling-up the inventing playing field, for example through universally accessible patent-quality technology. To expand access, through private efforts like the Medicines Patent Pool or pledges as well as public understanding and oversight of the patent system, this Article proposes the introduction of an independent Office of Public Interest and Partnerships in Innovation. Finally, introducing and centering equity metrics, like the number of first-time innovators, and measures of regional innovation, can bring a focus to increasing the size of the (innovation) pie by increasing equity in innovation.

Keywords: patents, innovation, inequality

JEL Classification: O34