Data disproves patent thickets – existing innovation is because of patents—there card

we read red
Adam Mossoff, 24 - Professor of Law, Antonin Scalia Law School George Mason University. Answers from Adam Mossoff to Questions
for the Record from Senator Alex Padilla Senate Committee on the Judiciary, Subcommittee on Intellectual Property, United States Senate “The
Patent Eligibility Restoration Act – Restoring Clarity, Certainty, and Predictability to the U.S. Patent System” 1/24,
https://www.judiciary.senate.gov/imo/media/doc/2024-01-23_-_qfr_responses_-_mossoff.pdf //DH

Although conventional wisdom and classical economics define patents as monopolies by which the incentive to invent is balanced against restraints on access and
higher short-term prices, this is a fundamental misunderstanding of the nature and function of patents. Patents and other intellectual property rights, such as

copyright and trademark, are not merely incentives to create, but also incentives to commercialize innovation. They
are property rights. Thus, they represent an equal opportunity for any person who creates a new invention to secure the fruits of their labors, just like any person
who works as a farmer or worker should have secured to them the fruits of their productive labors. Thus, patents, like all property rights, are the basis
for commercialization activities, such as obtaining venture capital financing, entering into license deals, and creating
new commercial structures for efficiently placing new products and services into the hands of
consumers, such as the franchise business model invented by U.S. patent owners in the nineteenth century. In the healthcare market, for example, this has
meant an ever-increasing supply of cuttingedge medical treatments and increasing availability of older medical treatments that are now “off patent.” Patents

not only function for companies to recoup billions in investments and thousands of labor hours in
creating new drugs and other healthcare innovations, they facilitate extensive licensing and information-
sharing agreements that efficiently distribute these healthcare innovations to patients. These extensive
manufacturing, commercial distribution, and information-sharing agreements were the launch pad for the unprecedented response by the biopharmaceutical sector
in inventing, producing, and distributing billions of doses of the COVID-19 vaccines during the pandemic—an achievement never before accomplished by the
biopharmaceutical sector since the invention and patent for Aspirin in 1900 and the invention of vaccines in the 18th century.1 Although drug prices are a subject of
policy debate, it is important to recognize that 95% of the essential medicines identified by the World Health Organization are in the public domain; thus, these
drugs are available for production by any generic company wishing to sell them in the healthcare market in any country in the world, subject to regulatory approval
by health officials.2 In
the high-tech sector, the patent system has driven an explosion in new products and
services at a rate never before seen in any sector of the global innovation economy. “Several empirical
studies demonstrate that the observed pattern in high-tech industries, especially in the smartphone industry, is one of
constant lower quality-adjusted prices, increased entry and competition, and higher performance
standards.”3 This has occurred in one of the most patent-intensive sectors of the economy.4 This empirical evidence contracted the
predictions of academics and economists almost twenty years ago that “patent holdup” and “patent
thickets” on smartphones and other high-tech devices would raise prices for consumers and stifle innovation.5 All of this
economic and historical evidence creates a strong presumption that reforming patent eligibility doctrine by returning it back to its longstanding function within the
U.S. patent system would benefit consumers. Consumers
will benefit from the continued creation of new products and
services and more jobs. Overall, the U.S. will continue to experience economic growth and a rising
standard of living for all consumers.

Power tagged, patent thickets on smartphones didn’t happen doesn’t mean it doesnt
exist pref neg on empirics

the whole last card isn’t saying they don’t exist it is just asking for examples so here is
some
Models demonstrate patent thickets substantially deck innovation
Bronwyn Hall et al. 16—Professor Emerita of Economics, UC Berkeley; Christian Helmers, Georg von
Graevenitz. ("Patent thickets and first-time patenting: New evidence," 4/1/2016, from VoxEU,
https://voxeu.org/article/patent-thickets-and-first-time-patenting-new-evidence)
Patent thickets can lead to hold‐up of innovations, increases in the complexity of negotiations over
licenses and increases in litigation, and can also create incentives to add more and weaker patents to
the patent system. All these phenomena increase transaction costs, reduce profits that derive from the
commercialisation of innovation, and ultimately reduce incentives to innovate.
One worry is that patent thickets may stop companies large and small from even entering those
technologies in which patent thickets are widespread. To investigate this question, in a recent paper we
analyse the effect of patent thickets on entry into technology areas by firms in the UK (Hall et al.
2015). We present a theoretical model that describes incentives to enter technology areas that differ in
the degree of technological opportunity, complexity of technology, and the potential for hold-up in
patent thickets.
We derive a number of predictions regarding the effects of
complexity (positive), opportunity (positive), and expected hold up (negative) on entry from the model.
The predictions are tested using data on patenting activity of UK firms where we define entry into a new
technology as first-time patenting in a given technology class by a company. We distinguish empirically
between complexity and hold-up potential and control for technological opportunity in several different
ways.
As shown in Figure 2, the measure of hold-up potential (Triples density coefficient)1 is associated with a
reduction of first time patenting in a given technology area, controlling for the level of technological
complexity and opportunity. The figure also shows that this relationship is independent of firm size in
our data. Technology areas characterised by more technological complexity (Network density
coefficient)2 and opportunity (Aggregate patenting coefficient,3 and 5-year growth NPL coefficient),4 in
contrast, see more entry. This is in line with the predictions we derive from the theoretical model. Our
evidence indicates that patent thickets raise entry costs, which leads to less entry into technologies. It is
important to emphasize that this result is not due simply to very active patenting in a technology nor to
citation density in general, as these have been controlled for.
Figure 2. The effect of thickets on technology entry
These results indeed support the view that many patents are filed in technologies in which there is a lot
of technological change, as well as the view that some of these technologies are associated with patent
thickets.
We show that patent thickets reduce entry (first time patenting in an area) by 20%, which
is substantial bearing in mind that the average probability of entry into a technology area is only about
1.5% in our sample.
This effect is surprisingly strong and suggests that measures to reduce patent thickets might allow more
entrants to compete in important technology areas.
Innovation is high now under current eligibility jurisprudence
David Jones, 2024 – executive director of the High Tech Inventors Alliance. Questions for the Record
from Senator Thom Tillis , Hearing on “The Patent Eligibility Restoration Act – Restoring Clarity,
Certainty, and Predictability to the U.S. Patent System” 1/24,
https://www.judiciary.senate.gov/imo/media/doc/2024-01-23_-_qfr_responses_-_jones.pdf

a. How has the current state of patent eligibility inhibited the development of next generation
technologies?

The current state of patent eligibility hasn’t inhibited the development of next generation technologies.
HTIA member companies are at the forefront of technologies like AI and quantum computing, are
among the largest patent owners in the world, and have experienced no negative effects from the
current jurisprudence. In fact, the available data suggest that current patent eligibility law has advanced
the development of next generation technologies.

b. What is the long-term technological and economic impact of the current eligibility jurisprudence?

Both the long-term technological and economic impacts are strongly positive. For further discussion,
please see my written testimony and my prior testimony to the Subcommittee.1

c. Can you quantify, in easy to understand terms, the economic impact of the current state of patent
eligibility?

A recent study confirmed that there has been “a positive association between Alice and both R&D
spending by software firms and patenting by firms that held relatively more software patents prior to
the Court’s opinion.”2 So, the impact has been positive for innovation, which is positive for long-term
economic growth.