Ehud Guttel

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Essay
Volume 91.1
Anti-Patents
Roy Baharad
Fellow, the Aumann-Fischer Center for Law, Economics and Public Policy, Hebrew University Faculty of Law.
Stuart Minor Benjamin
William Van Alstyne Professor of Law, Duke Law School.
Ehud Guttel
Bora Laskin Professor of Law, Hebrew University Faculty of Law; Visiting Professor of Law, Duke University.

For comments and suggestions, we thank Christopher Buccafusco, Edward Cheng, Daniel Levy, Ittai Paldor, Gideon Parchomovsky, Arti Rai, and Alex Stein. Gal Aharoni, Elza Bouhassira, Sarah Couillard, Noa Dadon Raveh, Neta Dagan, Ariel Melitz, Jessica Miller, Daniel Raas Rothschild, Shira Solow, and Rachel Taragin provided excellent research assistance.

Conventional wisdom has long perceived the patent and tort systems as separate legal entities, each tasked with a starkly different mission. Patent law rewards novel ideas; tort law deters harmful conduct. Against this backdrop, this Essay uncovers the opposing effects of patent and tort law on innovation, introducing the “injurer-innovator problem.” Patent law incentivizes injurers—often uniquely positioned to make technological breakthroughs—by allowing them to profit from licensing their inventions to competitors. Yet tort law, by imposing liability for failures to invest in care, forces injurers to incur the cost of implementing their own inventions. When the cost of self-implementation exceeds the revenues that may be reaped from patenting new technologies, injurers are better off refraining from developing socially desirable inventions. The injurer-innovator problem remarkably persists under both negligence and strict liability regimes, and in the face of different victim types. Multiple real-world examples demonstrate the extent and pervasiveness of this phenomenon. To realign the incentives provided by the patent and tort systems, this Essay proposes a new legal construct: anti-patents. While a standard patent grants an inventor the exclusive right to use its invention, an anti-patent creates the converse exclusivity regime: the inventor, and only the inventor, is not required to use the invention. Importantly, anti-patents retain the existing patent protection, allowing injurer-innovators to charge monopolistic prices from competitors but simultaneously eliminating the obstacle created by tort law. An injurer-innovator who owns an anti-patent will enjoy immunity from the heightened standard of care to which the rest of the industry would now be subject. The Essay further shows that the anti-patent mechanism not only succeeds at harmonizing patent and tort law toward the advancement of technological progress but also outperforms alternative schemes employed to stimulate innovation (i.e., prizes, grants, and tax benefits). Finally, it ties the logic that underlies anti-patents to existing doctrines designed to elicit the disclosure of private information.

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Article
87.1
Tort Liability and the Risk of Discriminatory Government
Ehud Guttel
Bora Laskin Professor, Hebrew University of Jerusalem Faculty of Law
Ariel Porat
President, Tel Aviv University

For their helpful comments, we thank Christopher Kutz, Meirav Furth-Matzkin, Lee Fennell, Daniel Hemel, Saul Levmore, Barak Medina, Jonathan Masur, Mitchell Polinsky, Yuval Procaccia, Weijia Rao, Re’em Segev, Stephen Sugarman, George Triantis, Eyal Zamir, and participants in the Annual Meeting of the American Law and Economics Association and in faculty workshops at the University of California, Berkeley, the University of Chicago, the Interdisciplinary Center Herzliya, the University of Haifa, the University of Southern California, Stanford University, and Tel Aviv University. For superb research assistance, we thank Bar Dor and Niva Orion.

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