Guest Post by Professor Chien: Inequality, Innovation, and Patents

Guest post by Colleen V. Chien, Associate Professor of Law at Santa Clara University School of Law. Thanks to the USPTO Office of the Chief Economist and Innography for sharing patent data.

Just over a week ago, the United States proposed tariffs on over 1,000 Chinese imports in response to various intellectual property grievances. China responded with a number of proposed counter-tariffs. One of the most notable, as well as unfortunate, aspects of China’s proposed tariffs—which heavily target American soybeans and pork—is that harms to U.S. producers would apparently disproportionately fall on certain Midwestern states that had previously benefited from access to Chinese markets.

I argue in a new working paper focused on the often-overlooked question of how innovation is distributed among various settings that just as trade creates winners and losers, so too does patented innovation. Advances in the accessibility and quality of open patent data, largely made possible by the USPTO’s Office of the Chief Economist, provide a way to explore distributional questions that have long been at the heart of the patent system.  Specifically, the data can give insight into the participation of small and independent innovators, the role of foreigners, and geographic and corporate concentration of patenting. It has also allowed recent discussions regarding who becomes an inventor and the extent to which innovation creates or destroys jobs.

As the paper documents, shifts in patented innovation over the last several decades have contributed to broader social and economic shifts away from manufacturing-based, domestic, and independent innovation, and towards digital, foreign, coastal, and corporate innovation – validating both optimistic accounts of immigration-driven, digital prosperity and pessimistic accounts of the shrinking role of domestic, manufacturing-based innovation. As the Figure[1] below shows, the shift in innovation towards urban and coastal locations also corresponds with, though is not necessarily caused by, the more liberal political attitudes of these areas. Also discussed in the paper are left and right wing “patent populism” – targeting both powerful IP “maximalists” and powerful IP “minimalists.”

Fig. 1F: 2015 Patents per 10K Capita                  Fig. 1G: 2016 Presidential Election Results

County Patent Density % Trump % Clinton
<3 patents 66.1% 39.9%
3+ patents 32.9% 67.1%

Data Sources: USPTO,[2] US Census,[3] (election data),[4]Author’s Analysis, Distributions calculated based on covered population in counties

However, to those of us who participate in the patent system, perhaps what is most striking is the increasingly unequal distribution of new patents to the point where 53%  of patent grants in 2016 were issued to the top 1% of grantees (up from 38% in 1986). Industry effects are strong, with some 83% of 2016 “electrical engineering” patents[5] going to the top 10% (as compared to 61% of chemistry[6] patents), but cannot explain the long-term trend. As the paper also details, while patent inequality is at a historic high, the share of small and micro entity patenting also appears to be at its lowest point in recent decades, though, not for the reasons you might suspect. (You’ll need to read the paper for the full story.)

Data Sources: USPTO PatentsView, Innography

Some of implications of the data are discussed in the paper, which raises more questions than it answers. Whatever one takes from them, however, it is clear, at least in my mind, that there is much to be learned by looking at not just the amount of patented innovation, but at how it is distributed.

[1] Produced by the talented Santa Clara Law 3L student Jerome Ma.

[2] 2015 Patent Listing by US County (available at



[5] A category defined by the scheme used by WIPO laid out by Shmoch, as including digital communications, computer technology, communications processes, telecommunications, and semiconductors.

[6] A category defined by the scheme used by WIPO laid out by Shmoch, as including pharmaceuticals, biotechnology, chemistry and environmental innovations.


30 thoughts on “Guest Post by Professor Chien: Inequality, Innovation, and Patents

  1. 5

    link to

    Dennis should read this and consider requiring greater disclosure from the “academics” (I’d call them mercs) that post on patentlyo.

    Note too Lemley saying he is not an unbiased observer and the fact that he has a large financial interest in Google. Was this posted when he publishes on here? Is Google giving money to universities to select anti-patent/IP professors?

    The far more interesting question rather than the tripe that these professors are paid to write is how Google and others are influencing the debate with money. And who is taking the money, for what, and how much.

    Please stop being a Google publisher Dennis.

    1. 5.1

      Note too that Mark Lemley went around on a talk show circuit and allowed himself to be presented as a professor at Stanford presenting academic work. Based on what we know now, I’d say that is an ethics violation and Stanford should investigate. Lemley says he is not an unbiased observer and has a large financial interest in Lemley.

      This is no where near over. Dennis should realize that tracking this and trying to bring integrity back to academy is the interesting thing. Stop posting this tripe from these bought off Google people.

      1. 5.1.1

        “Lemley says he is not an unbiased observer and has a large financial interest in Lemley.”

        Probably approaching 100%.

    2. 5.2

      Night Writer,

      Be that as it may (I have not had a chance to check deeply into the bonafides of that website), consider that Google’s actions are by no means limited to influencing academia. – from the “About Us” page:

      At the same time, the company has assiduously courted Washington. In 2015, Google spent more than $16.6 million on lobbyists – more than nay other technology company – and its lobbyists regularly meet with senior White House and agency officials to press the company’s agenda.

      You yourself have pointed out the number of visits of Google to Capitol Hill.

      You yourself have pointed out the level of influence spending (lobbying).

      We both have noted the wildly extensive Google unprecedented – and undocumented visits with the Patent Office.

      We both noted that when Lee first introduced an “anti-Tr011” measure, Google had already been into the agency and set up a preliminary system.

      Sunshine anyone?


      1. 5.2.1

        True enough anon. Did you see the immigration law was held unconstitutional for vagueness which is what you have been saying Alice is?


          Saw that – and even Greg Aharonian has lashed out in his email of today on the nonsense that the Court (routinely) peddles.

          In part:

          Justice Gorsuch (who apparently has never seen an iota of the patent and copyright statutes), writes:

          “Today’s vague laws may not be as invidious, but they can invite the exercise of arbitrary power all the same — by leaving the people in the dark about what the law demands and allowing prosecutors and courts to make it up.”

          As I have L O N G postulated, the Court has basically ignored what Congress did in the Act of 1952 and insisted on being able to continually jam their fingers into the wax nose of 101.

          And yet, we STILL have posters here celebrating the broken scoreboard and not even noticing the real issue IS that the scoreboard is broken.

    3. 5.3

      Grain of salt (from a link discussing Euro activities):

      The disclosures by the Campaign for Accountability, which published a similar report last year outlining Google’s links with U.S. academics, also shed light on the tug-of-war between the search giant and its tech rivals. The Washington-based group is partly funded by Oracle, a long-time staunch Google critic, which also holds legal control over FairSearch, another anti-Google group at the center of Europe’s antitrust charges against the company.

  2. 4

    To a reasonable, freedom loving person, statistics on distribution are irrelevant. Equal opportunity is what is important, not equal outcome. All the statistics show for certain is that innovation is taking place. The fact that the top companies get the most patents is totally expected. They spend more on R&D, they have more innovations, so they get more patents. To a non-socialist, again, equal opportunity is what is important, not equal outcome. Don’t forget that socialist economies are the absolute worst in the world. A socialist patent system would also be the worst possible patent system.

    1. 4.1

      “To a reasonable, freedom loving person”

      It is hard to tell but if one simply looks at wide trends and anecdotal indicators, this is a rapidly diminishing population in the Western world. The best of places are becoming far worse than they were, and there is literally nowhere safe for them/us to flee to for refuge.

      It is as though any population who inherits hard won freedoms and morally validated individual rights eventually loses sight of their crucial importance to life and a proper society, and gives them up for the sake of sloth, passivity, and the whim to evade self-responsibility.

      Like a spoiled son of a wealthy industrialist who has lost sight of what makes wealth and its production possible, the West is taking what were once great and life supporting principles and systems and is slowly squandering and destroying them, to the ruin of all.

      1. 4.1.1

        In 1896 a book by Samuel E. Keeble extolling socialism suggested that the capitalism would metaphorically hang itself:

        But, according to the German Socialists, deliverance lies in the very success of Capitalism—by giving it rope enough it will hang itself. It will so mass in its own hands the instruments of production and distribution—land, machinery, railways, etc., that the expropriated community—disciplined, educated, and drilled by Capitalism itself—will finally rise, in some countries quietly, in others violently, and ‘expropriate the expropriators,’ or, in other words, put the community in possession of the land and the remaining instruments of production and distribution.

  3. 3

    “unequal distribution of new patents to the point where 53% of patent grants in 2016 were issued to the top 1% of grantees (up from 38% in 1986).”

    Add to that, something which is almost never discussed in depth, the fact that there is a huge uneven distribution of new patents between inventors/creative people versus non-creative non-inventive people. This is compounded by the unequal distribution of profit as between successful companies which produce goods and services of value and those unsuccessful companies which do not. The successful companies then abuse their privilege and power of their success, namely profit they can invest, and hire more inventors and creative people, with the result that more and more patents become concentrated in the top 1%.

    It’s really quite a spectacle… what kind of country allows such a thing to happen?

  4. 2

    This, by the way, is one of the Lemley professors. Probably fueled by Google.

    Take anything she writes with a grain of salt and a shot of bourbon. I read her article she wrote for the Washington Post. Again–unethical. Many misrepresentation and omissions. Shameful that a profession can do anything they want with no consequences.

    1. 2.1

      It is just untenable going forward to try to have legal system when professors can publish whatever they want with no regards to ethics.

      1. 2.1.1

        If it is untenable, how has our legal system endured for so long? It is not as if there were strict ethics enforcement mechanisms in place 100 years ago that have relaxed in the last decade. The academy operates much as it has always operated.


          Is that true Greg? I’d like to see some evidence of that. I’ve read some things that say that is not true. That we have entered this new era where the law professors can pretty much do whatever they want with impunity because the law schools refuse to hear ethics complaints against their professors.


            I’d like to see some evidence of that.

            A very sensible request. I take it that you think it intuitively clear that ethical standards in the academy are declining, whereas I think it intuitively clear that such standards are not declining. We both approach the question with certain priors, so evidence is needed to regulate the dispute.

            Sadly, I do not have much by way of evidence to offer. A little bit of Google searching turned up remarkably few instances of people making ethics complaints against academics, but presumably the partially reflects the fact that such complaints are frequently lodged in a confidential process, which would not appear on Google.

            Similarly, I could find only one school’s published ethics statement online. I could not find any previous versions of the statement, so it is not possible to say whether the standard has changed (for stricter or looser) over time.

            In other words, evidently there is little evidence to support either of our views. Whereof one has no data, thereof one must remain silent, so I must withdraw my 2.1.1.


              …and then one can actually employ some thinking along the lines as to why attorneys have their own ethics code and how academics should DOUBLY have more stringent codes (given the propositions offered).

              But Greg does not want to be bothered with those points….


          The academy operates much as it has always operated.

          See the Savings & Loan debacle (among others) that show academic capture.

          Your “What me worry” mindset is rather disappointing Greg.

          At one point in time, nobody bothered to control lots of items that have since been deemed worthy to control.

  5. 1

    [S]ome 83% of 2016 “electrical engineering” patents[5] go[] to the top 10% (as compared to 61% of chemistry[6] patents)…

    These numbers do not jibe with the oft-repeated assertion that software innovation is the sort of innovation most accessible to individuals.

    1. 1.2

      Accessibility need not even be correlated with applications.

      Stop and think, Greg.

      What are the raw materials needed for most any type of innovation across a spectrum of art classes?

      Please stop Tr011ing.

      1. 1.2.1

        “What are the raw materials needed for most any type of innovation across a spectrum of art classes?”

        I suspect that if anyone else made such a comment you’d drop some abstruse snark about how our system does not require actual reduction to practice.


          Different context Ben.

          Certainly, actual reduction to practice is not required.

          But let’s touch on that for a moment – to which side does that position cut in this context?

          Let’s say that you have a innovation in Pharma and an innovation in software.

          The fact of the matter that no actual reduction to practice is required may – if one does not think critically – end up “being a draw” – affecting neither innovation.

          But take a closer look. Which art unit has actual cost factors associated with R&D that DO affect the balance of innovation?

          The plain bottom line here is that software innovation is despised by intellectual snobs BECAUSE it has such a low cost factor profile.

          This has historical reflections as well – to wit, the Supreme Court’s Flash of Genius views. Likewise, the oft stated “well we need patents in that area because cost factors are high and we need those innovators to be able to recoup their costs.

          Mind you, recouping costs IS one reason for patents. It is even a god reason. But it is a colossal mistake to think that it is the ONLY reason or even that it is a necessary reason.

          Your attempted denigration then (abstruse snark) misses the mark – and misses badly.

    2. 1.3


      I thought “innovating” was something people do and “innovations” things people produce…

      I did not know it was something (I know not what) people “accessed”.

      1. 1.3.1

        Naturally, I agree with you. I think that it is silly to concern ourselves with the question of whether invention is happening more in corporate laboratories or in suburban garages. The point of the patent system is to incentivize innovation, and we should not care overmuch whither that innovation arises.

        Certain parties, however, make a rather loopy socialist argument in favor of §101 eligibility for software on the grounds that this is a species of innovation in which even the “little guy” can participate. As it happens, I agree with the idea that software should not be excluded from §101 eligibility, but this is nevertheless a transparently bad argument for a good conclusion. It was a discernibly poor argument even before we had empirical evidence to confound it.

        Now that it turns out to be empirically unsupportable as well as awkward in its theoretical presentation, one might hope that this argument would be allowed to fade out. Somehow, however, I am dubious that such will come to pass.


          Certain parties, however, make a rather loopy socialist argument in favor of §101 eligibility for software on the grounds that this is a species of innovation in which even the “little guy” can participate.

          Certainly not “loopy” and certainly evident on its face alone.

          As I mentioned Greg (and to which you have glibly ignored) – look at the required assets for innovation in a number of different art units.

          Discernably poor argument?

          Not at all. Unless you think that cost factors have nothing to do with any innovation effort. Now THAT would be “loopy” and “discernably poor.”

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