September 19, 2006 is primary day here in Massachusetts.  In the recent Patently-O readership poll, 542 readers cast their vote (one per computer). Those results show that slightly over half of the voting readers work in law firms.  Of those, two-fifths are in small firms.  Twenty-two percent of readers hail from in-house jobs in corporate America while about fifteen percent come from academia.  Government jobs only grabbed eight percent — although that category was not added until after 150 people had already voted. Thanks for participating!

In a related note, Patently-O reader (and creator of ToolPat) Scott Kamholz recently did his own empirical work of blue and red states. His results:

9,060 total U.S. patents issued to U.S. assignees in August 2006.
6,635 issued to assignees in "blue" states.
2,425 issued to assignees in "red" states.

A number of studies have shown that patent valuation is highly skewed.  The majority of patents are barely worth enough to cover prosecution costs, a substantial number have a moderate return, and a few are highly valuable. Chris Anderson just wrote a book on taking advantage of highly-skewed markets — titled The Long Tail.

The effect of this skew in the IP world has been dubbed the “patent lottery” because most of the payout involves a low probability of a high return. 

Lots of people think of the state-run lottery as a total scam because the expected value of a one dollar ticket is only about fifty cents.  The state rakes-in about half of the cost of every ticket and pays the other half out in winnings.  For anyone interested in wealth management and growth — this is not a good investment strategy. But, the state-run lottery is hugely popular with billions of dollars thrown at the system every year by hopeful winners. ($1.8b in Illinois alone in FY2005).  People explain this phenom in many ways — usually some combination of arguments such as: (1) the thrill of playing is worth the fifty-cent loss, (2) we generally don’t do well calculating the return low odds, and (3) we make stupid choices. [Note here that I have purchased a number lottery tickets in the past — especially when the jackpot is very large.]

Unlike the state-run lottery, in the patent system we don’t really know the odds of success very well and we don’t know whether potential innovators are willing to play “bad odds.”  I would like to get some input on this point.  Question for readers:

Would you or your clients be willing to invest time and/or money in developing a new innovation that had only a small chance of reaping huge rewards if you knew that the expected (and most likely) return would less than your original investment?

Comments are open — you can also e-mail me dcrouch@gmail.com.

Public Announcement:

The Honorable Kimberly A. Moore was sworn in as a circuit judge on the U.S. Court of Appeals for the Federal Circuit on September 8, 2006. The oath of office was administered to Judge Moore by Chief Judge Paul Michel in the presence of Judge Moore's family and judges of the court. A public ceremony will follow, date to be announced later.

Unlike many new judges, Judge Moore has a significant history of interesting and thought provoking scholarship.  A thorough study of her writings would set an interesting marker to be compared with her judicial decisions down the line.