Freilich & Ouellette: USPTO should require prophetic examples to be clearly labeled to avoid confusion

Professor Janet Freilich (Fordham Law) has a fantastic forthcoming law review article, Prophetic Patents, which puts a spotlight on the common practice of submitting patent applications containing entirely hypothetical experimental results. These "prophetic examples" are permitted as long as the predicted results are not in the past tense. Using this tense rule, Freilich analyzed over two million U.S. patents in chemistry and biology, and she estimates that 17% of examples in these patents are prophetic. Prophetic examples may be familiar to patent drafters, but scientists and engineers who learn about them generally describe them as bizarre, and even some patent scholars are unfamiliar with the practice. Prophetic Patents was the one article by a lawyer selected for the 2018 NBER Summer Institute on Innovation, and the economist-heavy audience was fascinated by the concept—many were not even aware that researchers can obtain a patent without actually implementing an invention, much less that patents can contain hypothetical data.

Freilich notes the potential benefits of allowing untested ideas to be patented in terms of encouraging earlier disclosure and helping firms acquire financing, though she finds that patents with prophetic examples are not broader (based on claim word count), filed earlier (based on AIA implementation), or more likely to be filed by small entities. I'm very sympathetic to the argument that the current legal standard may allow speculative ideas to be patented too early—I've argued in prior work that all the competing policy considerations raised by Pierson v. Post about the optimal timing of property rights suggest that many patents are currently awarded prematurely. This is a challenging empirical question, however, because we cannot observe the counterfactual innovation ecosystem operating under a different legal standard.

But while pondering the hard question of the timing of patentability, patent scholars should not lose sight of the easy question: even if patenting untested inventions is socially desirable, there is no reason these patents need to be confusing. To me, Freilich's most interesting empirical result is her study of how often prophetic patents are mis-cited in scientific publications. She looked at 100 randomly selected patents with only prophetic examples that were cited in a scientific article or book for a specific proposition, and she found that 99 were not cited in a way that made clear they were prophetic. Instead, they were cited with phrases such as "[d]ehydration reaction in gas phase has been carried out over solid acid catalysts" (emphasis added). And it is not surprising that scientist readers are misled: many prophetic examples do confusingly mimic actual experiments, with specific numerical results. In prior work, I have shown that contrary to the assertions of some patent scholars, a substantial number of scientists do look to the patent literature to learn new technical information. So it is concerning that a large number of patents are written in a way that can be confusing to readers unfamiliar with the tense rule.

Freilich and I teamed up on a new project for which we interviewed patent drafters to explore whether prophetic examples have any important benefits for patentees that could not be obtained through less misleading methods of constructive reduction to practice. In Science Fiction: Fictitious Experiments in Patents—just published in last week's Science—we explain that the answer is no. Patent prosecutors who rarely use prophetic examples argued that there is no legal reason to use fictitious experiments with specific results rather than more general predictions. Those who usually use prophetic examples agreed that more explicit labeling would not affect the patents' legal strength. The only benefit to patentees that would be reduced by requiring greater clarity seems to be any benefit that comes from confusion, which does not seem worth preserving.

The USPTO already requires prophetic examples to be labeled by tense. But the tense rule is unfamiliar to many readers (including scientists and investors), and the distinction in tenses may be literally lost in translation in foreign patent offices. (For example, the form of Chinese verbs does not change with tense.) There is no good justification for not having a more explicit label, such as "hypothetical experiment." As Freilich and I conclude: "Just because some patents are not based on actual results does not mean they need to be confusing. Scientists regularly write grant applications in a way that makes clear what preliminary data they have already acquired and what the expected goal of the proposed project is. Perhaps this is an area in which the patent system could learn from the scientific community."

Samantha Zyontz on CRISPR Adoption

Pierre Azoulay's recent Twitter thread on students from the MIT Sloan TIES PhD program who are currently on the market alerted me to Sam Zyontz's interesting work on the CRISPR genome editing tool. CRISPR has captivated the patent world due to the fight between the University of California and MIT's Broad Institute over key patent rights—Jake Sherkow summarized the dispute in May and reflected on the Federal Circuit's decision in September. But CRISPR is of course also interesting to innovation scholars due to the revolutionary nature of the technology itself (this is why the patent rights were worth fighting for), which has the potential to applied to a tremendous variety of applications. Using data on researchers who attempt to experiment with CRISPR and the smaller number who succeed in publishing new findings using the technology, Zyontz has produced some fascinating findings on hurdles to technological diffusion.

Zyontz's work was made possible because of the nonprofit global plasmid repository Addgene, which received the basic biological tools for CRISPR from researchers at the University of California and the Broad Institute in 2012 and 2013. Since then, researchers have had easy access to CRISPR tools for the low cost of $65 per plasmid.

For her 2016 Master's thesis, Technological Breakthroughs, Entry, and the Direction of Scientific Progress: Evidence from CRISPR/Cas9, Zyontz did not yet have information about the identities of the ordering labs, but she combined data about what kinds of plasmids were being ordered from Addgene (through 2014) with CRISPR-related publications in Elsevier's Scopus database (through 2015). Her main finding is that the increase in mammalian genetic engineering research was primarily due to new researchers attracted to the genetic engineering field rather than to increased productivity of researchers who had been working on mammalian models or a shift by researchers who had previously published on bacterial genetic engineering.

In a subsequent paper with Neil Thompson, Who Tries (and Who Succeeds) in Staying at the Forefront of Science: Evidence from the DNA-Editing Technology, CRISPR (posted in 2017), Zyontz was able to match individual labs that requested CRISPR plasmids with their subsequent publications, allowing a more direct examination of which researchers succeeded in adopting the technology (what Thompson and Zyontz call "conversion"). Overall, they find that of the 164,993 US authors who publish in genetic engineering, 1.81% ordered CRISPR tools in 2012-14, with an average success rate (subsequent CRISPR publication) of 11.30%. Interestingly, once they control for researcher quality, there is no location effect on experimenting with CRISPR—researchers in Cambridge and Berkeley were not more likely than similar researchers in other locations to order CRISPR tools. But location had a large effect on successful conversion into a publication: researchers were more successful with mammalian CRISPR use if they were located in Cambridge (where CRISPR was first successful with mammalian cells).

Zyontz's job talk paper, Running with (CRISPR) Scissors: Tool Adoption and Team Assembly, only has the abstract currently available online, though she quickly replied to my email asking about a draft. She digs deeper into these barriers to CRISPR adoption by quantifying the role of "external tool specialists" who aid in adopting and applying the technology. She takes advantage of natural differences in the difficulty of using CRISPR in the different areas. Here's how she summarized her results in an email:

In tool adoption cases, like CRISPR, where complementary know-how is needed, external tool specialists can provide that know-how across applications. External tool specialists are scientists that know CRISPR, but not necessarily the application area. But when such tool specialists are scarce and there is a rush to adopt the tool, teams have a choice of how to use external specialists. Either external specialists join teams that go after the easiest applications to get the tool to more areas faster (or just to publish more papers in general) or they join teams that go after the most complex problems where their human capital is more necessary. I find that external tool specialists contribute more to early adopter teams that provide innovations in difficult application areas, and not the low hanging fruit. In the easier applications, teams in the application area are more inclined to learn how to use CRISPR themselves for new innovations. Interestingly, this effect does not diminish right away. External tool specialists are still used for subsequent innovations in more difficult applications.

Legal scholars have discussed both barriers to accessing physical research tools and the importance of human capital in facilitating tacit knowledge transfer, but as with many issues of innovation law, there has been far too little evidence to inform these discussions. It is thus exciting to see this detailed exploration of knowledge diffusion in a particular technological field.