Professor analyzing decades of data to determine patent value

Tuesday, August 30, 2016

LAWRENCE — For more than two centuries, patents have been considered a key governmental policy tool for economic innovation. And for just as long numerous assumptions have been made about what they mean to an innovation’s value, where the most important ones are litigated and numerous other questions. A University of Kansas law professor is part of a project that is providing definitive answers to these and other patent questions for policy makers through a unique, big-data approach.

Andrew Torrance, the Earl B. Schurtz Research Professor at the University of Kansas School of Law, and colleagues have developed an approach to analyze mountains of detailed U.S. patent data from 1976 to the present day. One application of their research, commissioned by Canada's Ministry of Innovation, has been a comprehensive analysis of how patents having either Canadian inventors or owners compare with those without such connections. One of their most striking findings is that patents listing at least one Canadian inventor are more than 15 percent more valuable, on average, than other patents.

In a separate study, they have shown that litigated patents tend to be much more valuable than those that avoid court, and that federal courts in the southern midsection of the U.S. play host to litigations involving the most consistently valuable patents. Current studies involve comparisons of patent values of so-called “patent trolls” and companies whose goods or services are covered by their patents, an exploration of which parts of the U.S. give rise to inventors of more valuable patents, and which areas of technology give rise to the most valuable patents.

The U.S. Patent Office recently made decades of patent data available online. Torrance and colleagues Jevin West and Carl Bergstrom of the University of Washington used this data to build a huge database which they can use to analyze the data from a myriad of perspectives. Through this approach, they hope to test many questions arising from the perceived wisdom about patents.

“We’ve put that data together in a giant database and added other data to it as well that includes information on every U.S. patent from 1976 until last Tuesday (the day new patent data is released by the United States Patent & Trademark Office each week),” Torrance said. “We have transformed it into an easy-to-use form that allows us to run many different types of analyses.”

The Canadian Ministry of Innovation approached Torrance to learn more about the value Canadian inventors add to American patents. Their goal was to learn more about how Canadian inventors and companies perform in the U.S. patent system. The data provided a number of fascinating insights possible only through a big data approach, including one that should make Canada quite happy.

“We found that, when you add a Canadian to a U.S. patent as an inventor, that patent tends to increase in value by more than 15 percent,” Torrance said. “When you add a generic, non-American from another country, the average patent value actually tends to go down. This raises intriguing questions about how Canada fosters more successful inventors.”

What’s not clear is why Canadian inventors tend to increase a patent’s value. It could be due to the particular technology fields in which Canadians tend to invent, characteristics of science and technology education in Canada, or Canadian skill at collaborating with other talented inventors, Torrance said. But he and colleagues are beginning to analyze the data to calculate the average values of patents generated by inventors from every other country to compare them all.

The findings are unique because the data they are drawn from was largely unavailable for decades, which forced people to make assumptions about the patent system and value of patents it issued. Additionally, because the data accessed is comprehensive, the analyses can provide objective answers based on all the data rather than just small random samples.

Torrance compared it to polling: Political polls ask a sample of people questions such as which candidate they plan to vote for, then report who has a lead, based on the representative sample of people they polled. That method, widely used in research for many years, can provide a good idea of the answer to a question, but it comes with built-in error margins. The method Torrance and his colleagues are using, however, gives definitive answers because it relies on all the data. It is akin to being able to access every voter and get a definitive answer on whom they voted for.

“Having these gigantic data sets finally allows us to answer questions about which, until now, people could only speculate – and often speculate wildly,” Torrance said. “Now we can formulate a question about patent law, such as, ‘How valuable do design patents tend to be compared to utility patents,’ write a software script to analyze our huge data set and then see what answer the data give. That simply was not possible before the era of big data.”

Torrance and colleagues have already submitted their preliminary analyses of Canadian inventors and patent owners to the government of Canada, which then hopes to use the resulting insights in future policy decisions regarding the Canadian patent system and how it influences innovation. Torrance and colleagues plan to publish these findings and plan to carry out many more analyses using their data.

“Our big patent data research should keep us busy for a while,” Torrance said. “There are myriad basic questions we can now answer.”

Two projects they’ve already begun are looking at the value of patents that are litigated and where litigation of the most valuable patents takes place. In the former case, there has long been a school of thought that holds patents that are litigated in court are not inherently more valuable than those left unlitigated but are acquired by companies with the resources to hire teams of attorneys to assert those patents against others in legal proceedings.

In the latter, it has long been assumed that most patents are litigated on the coasts, and that the middle of the country is a “patent flyover country” of sorts. Contrary to this assumption, the big patent data analysis has showed that both assumptions, though long-held, are extremely inaccurate. For example, the highest concentration of valuable-patent litigation occurs in the southern middle of the country, with the coasts and the north lagging behind. Publications are forthcoming on both topics.

Torrance was also recently named a senior fellow with the Center for International Governance Innovation, or CIGI, International Law Research Program. The international, nonpartisan think tank focuses on improving international governance through research on the global economy, global security and politics, and international law. The organization brings scholars from around the world together to provide governments information on innovation and how it can address problems such as human rights, avoiding war, fighting terrorism and poverty, improving development and the standard of living for people worldwide.

Torrance hopes his ongoing research, both into patent systems and user, open, collaborative and free innovation, through CIGI, will be valuable in contributing to CIGI’s goals and to questioning assumptions that may not survive rigorous scrutiny.

“It’s great to be able to ask basic questions, then look at the data and see what they say, compared to what the assumptions are,” Torrance said. “We’re already in the age of data and are increasingly able to answer questions that were infeasible to tackle before. My background is in science, and it’s gratifying to be able to apply the scientific method to legal questions, especially when the answers upend long-held, but unjustified, assumptions. This is a great way to improve the law.”

KU Today: Biology and law collide in award winner’s work

"Kansas University Earl B. Shurtz Research Professor Andrew Torrance has degrees in biology, genetics and law. He has taught at Harvard and MIT, and even advised President Barack Obama during his candidacy. He is truly a modern-day renaissance man.

'I really like dealing with cutting-edge science and the legal issues it raises,' Torrance said.

This spring, Torrance was recognized by Chancellor Bernadette Gray-Little for his talents, as one of four professors to receive the University Scholarly Achievement Award last year.

Citizens have right to improve technologies without fear of legal action, professor says

Tuesday, October 13, 2015

LAWRENCE — The time has come for a philosophical change in the way the American legal system, government and private business view innovations created by private citizens, a University of Kansas professor argues in a new law review article. “Citizen innovators” have the legal right to develop new and better technologies without fear of interference from overregulation and excessive intellectual property. The “right to innovate” flows from the U.S. Constitution, the common law, federal laws called “organic statutes” and presidential executive orders.

Andrew Torrance, Earl B. Shurtz Research Professor at KU School of Law and visiting scientist at the MIT Sloan School of Management, and his colleague, Eric von Hippel, T. Wilson Professor of Management at the MIT Sloan School of Management, have co-authored “The Right to Innovate,” a Michigan State Law Review article that offers three approaches to protecting “citizen innovators” and their right to engage in noncommercial innovation to satisfy their own needs and to share their innovations freely for the betterment of society.

Technology has greatly leveled the playing field of innovation. Whereas private companies and government were formerly believed to create almost all new products and technologies, von Hippel’s pioneering economic research on “user innovation” has revealed that private citizens can, and do, also produce new medicines, medical devices, software, automotive improvements, educational methods and myriad other useful inventions in their own homes. As long as they are not endangering anyone or profiting from their work, their innovative activities are largely beyond the jurisdiction of regulatory agencies and intellectual property owners, the authors argue.

“Citizens have a robust legal right to innovate in all sorts of ways. From medical devices to drones, to better ways to irrigate fields, the sky is the limit,” Torrance said. “The pressure they face from government is unwelcome, chilling and often illegitimate. The right to innovate benefits all of society and is one of the rights of citizenship.”

The authors use the metaphor of “innovation wetlands” in their work. Historically in the United States, wetlands were viewed as barriers, wastefully unusable lands or even health hazards. They were denigrated at “malarial swamps” and feared as breeding grounds for diseases. The only good swamp was a drained or filled-in swamp. However, biological science eventually discovered they, in fact, provide numerous vital ecological amenities, such as cleaning water, providing refuge for migrating birds, acting as nurseries for young fish and buffering against floods. These discoveries in time led to the Clean Water Act of 1972 that protects wetlands.

Whereas private citizens who develop their own products and improve existing products, were long thought to pose nuisances or cause harm to businesses and government, a vast body of empirical evidence now shows that citizen innovation is, in fact, greatly beneficial to society, Torrance says. Some studies suggest that most useful innovation originates from noncommercial citizen innovation rather than corporate and governmental research and development efforts.

Torrance shares the example of NightScout, a group of software engineers who successfully hacked a Food and Drug Administration-approved medical device designed to make careful measurements of blood sugar in individuals with Type-1 diabetes. NightScout then was able to improve the device by allowing its output to be viewed on any smartphone via a custom-written app. Using this app, loved ones could monitor the blood-glucose levels of their children, spouses or friends. In fact, NightScout is named after the need to monitor blood-glucose levels of Type-1 diabetics while they sleep – a dangerous time for these people due to the constant threat of falling into a diabetic coma, or dying, while asleep. Though the technology was made available to anyone for free, the FDA initially tried to stop such innovation, which they see as potentially dangerous. In the end, the FDA seemed to conclude that they lack jurisdiction to stop such innovation.

“Even the FDA realizes there is not much you can do to stop citizen innovation. If you think about it from an ethical perspective, regulatory agencies should generally celebrate, not try to stop, such improvements,” Torrance said. “As a default position, government agencies often assume they have the legal right to stop citizen innovation. A proper reading of the law, including both constitutional and venerable common law principles concerning commerce, liberty, autonomy, privacy, free association and free speech, shows this socially harmful attitude to be legally unjustified. The right of citizens to innovation to satisfy their own needs, and then freely share their innovations with others, is quite strong.”

Private companies do need governmental permission when developing new technologies because they intend to profit from them. If money crosses state lines in association with such innovation, regulatory agencies do have jurisdiction over such activities. Noncommercial citizen innovation, however, is largely free of such oversight.

Citizen innovators often abandon inventing when faced with governmental scrutiny or legal action because they are either unaware of their rights or lack the resources to hire attorneys to defend them. This sort of overregulation and overlitigation stifles innovation and harms society, the authors argue. To combat this chilling effect, the authors include a “toolkit” for innovators to help them understand their rights.

The toolkit outlines the right to liberty; privacy; First Amendment rights to free speech, press and association; the Fourth Amendment, and rights reserved to the people, among other legal principles protective of citizen innovation. Innovators often are not aware of their rights, such as a right to privacy, which discourages governments and others from prying into activities carried out in citizens’ own homes. Knowledge of those rights is vital as there are millions of citizen innovators, and their activities vastly outweigh those of all private and governmental research and developmental employees combined, Torrance said.

The authors also outline common law rights that protect innovation among private citizens, discuss ways in which governments should account for the benefits of citizen innovation and the costs of overregulating it, in their own cost-benefit analyses, and the benefit of designing regulations that citizen innovators can comply with at very low costs.

Technology has rapidly evolved, drastically changing the paradigm of innovation.  As von Hippel has written, this has “democratized” innovation. Whereas only government or academics were able to access computers and sophisticated technical equipment in the past, people can now program software on their smartphones, scan and replicate physical objects at home, and even engage in biotechnological research and development once impossible outside expensive laboratories. Torrance and von Hippel argue it is time for the law to evolve and recognize that a “democratization of innovation” is not only legal, but it is beneficial as well.

“The fact that innovation is coming from new sources is wonderful for society,” Torrance said. “But the legal system is better at crushing citizen innovation than fostering and protecting it. What Eric and I are concerned about is that, if you don’t recognize this vital source of innovation, and protect it from overregulation and overzealous application of intellectual property, you risk destroying it just as we used to destroy wetlands. In both cases, we need to celebrate these valuable amenities and enlist the law to ensure they survive and thrive.”

KU law school to host nation’s leading annual patent scholarship conference

Thursday, April 09, 2015
 
LAWRENCE — Infectious diseases kill more than 10 million people each year, most of them in the developing world. The high cost of life-saving drugs is one barrier to treatment. Should strong patent protection, which drives up pharmaceutical prices, keep people from getting the medicine they need to survive?

It’s one of many questions that scholars will explore during the fifth annual Patent Conference on April 10-11 at the University of Kansas School of Law. Patent scholars from nearly a dozen countries and four continents – in law, economics, management science and other disciplines – will share the latest research on patent law, policy and business. The program is free, and registration is not required.

Plenary speakers include Colleen Chien, Santa Clara law professor and former senior adviser to the White House Office of Science and Technology Policy; Eric von Hippel, economist and professor at the MIT Sloan School of Management; and A. Christal Sheppard, director of the U.S. Patent and Trademark Office satellite branch in Detroit.

“One of the most exciting aspects of PatCon is the opportunity not only to share bleeding-edge patent research but also to hear the debates this research spurs among the leading patent experts who attend,” said Andrew Torrance, professor of law and co-founder of the conference. “For example, one of the hottest topics in patent law today involves so-called ‘patent trolls’ and how they either promote or harm innovation. In fact, many of the scholars at PatCon have signed one of two competing letters sent to Congress just two weeks ago raising serious concerns about trolls.”

Other topics will include the role that patents play in inequality, international patent issues, patent policy, how to value complicated property rights like patents, whether patents promote or crush innovation, and exploding interest in design patents.

“Another exciting phenomenon is the rise of ‘big patent data,’ which scholars are increasingly using to answer fundamental questions about the patent system and even to challenge long-accepted legal doctrines,” Torrance said. “Some of the leading ‘big patent data’ experts will be presenting their latest, often surprising, results at PatCon.”

The School of Law hosted the inaugural Patent Conference in April 2011. Affectionately known as PatCon, the conference has snowballed into the country’s leading annual patent scholarship conference. It rotates among the law schools of its founding professors: Torrance; David Olson, Boston College Law School; David Schwartz, Illinois Institute of Technology Chicago-Kent College of Law, and Ted Sichelman, University of San Diego School of Law.

The program is co-sponsored by the KU School of Law, Hovey Williams LLP and Lathrop & Gage LLP.

Preview the schedule and speakers.

Penn Law alum and ITC Commissioner gives keynote at PIPG symposium on design patents

"On March 19, the Penn Intellectual Property Group featured a symposium on design patents and the convergence of existing intellectual property regimes. The event kicked off with keynote speaker Commissioner F. Scott Kieff L’94 of the U.S. International Trade Commission and featured a panel discussion about the past and future of design patents.

. . . 

Cargill suit highlights weight of foreign rules

Reuters reported: 

Cargill’s lawsuit against Syngenta over losses stemming from China’s rejection of genetically modified corn demonstrates how U.S. markets are becoming increasingly subject to foreign rules, say legal experts.

Cargill sued Syngenta Sept. 12 in Louisiana state court for “negligence” in selling U.S. farmers a GM variety that had not yet been approved for import in China.

Cargill case highlights foreign regulatory influence in U.S. : experts

Andrew Chung wrote:

"Major U.S. grain exporter Cargill Inc's lawsuit against Syngenta AG over losses stemming from China's rejection of genetically modified corn demonstrates how U.S. markets are becoming increasingly subject to foreign rules, legal experts said on Tuesday.

Cargill sued Syngenta on Friday in Louisiana state court for "negligence" in selling U.S. farmers a genetically modified seed that had not yet been approved for import in China.

Professor examining potential laws to regulate de-extinction

Wednesday, August 21, 2013

LAWRENCE — Science has a way of catching up with fantasy. While movies like “Jurassic Park” brought dinosaurs back to life, few imagined that the day might come when extinct creatures could be revived. But the possibility of such revival is not only real, it’s getting closer all the time. A University of Kansas law professor is part of a group of scholars working to propose legal framework to address the myriad questions “de-extinction” will bring to the table.

Andrew Torrance, professor of law and Docking Faculty Scholar at KU’s School of Law, recently took part in a de-extinction conference at Stanford University and is crafting suggestions for potential law to deal with the controversial science as it becomes reality.

“I have a weakness for exactly this kind of project,” Torrance said. “It’s very cool from a scientific perspective, plus I think I was like every kid growing up who thought, ‘Wouldn’t it be cool if I could see a dinosaur some day?’”

While dinosaurs won’t be revived — the fossils are too old and contain no usable DNA — other more recently extinct creatures such as woolly mammoths, saber-toothed tigers and passenger pigeons could potentially be revived. The biotechnology is mostly in place. What’s not in place is law to address questions such as who would own such revived creatures, how their habitat would be governed, international relations among countries housing such creatures and who would be responsible for potential damages among others. Torrance, who holds a doctorate in biology and law degree from Harvard University, was part of the Harvard conference to address the legality of such matters. Other scholars addressed the ethical and philosophical questions.

“The basic science is already there. You have to somehow get a full genome, which is not a trivial problem, but a lot of those breakthroughs have been made,” Torrance said. “In some ways, though, the technology is not as important as the ethical and legal questions. If you resurrected a mammoth, would you set it loose in Times Square? And who would be liable for the damage it caused?”

Torrance advocates for developing a legal framework to address de-extinction before it’s common practice and says there are precedents that can be used to start the process. At the conference he cited the Endangered Species Act, a popular bipartisan law/legislation that allows for protection of endangered species. The law and its implications must be considered in respect to de-extinction he said, as the incentive to protect endangered creatures might wane if people believe they can simply bring it back in a generation or two.

“It changes the idea of what endangerment means. And it changes the meaning of extinction,” Torrance said. “If a creature can be brought back, was it ever really extinct?”

Torrance also addressed the question of how revived species would affect current ecosystems. He cites numerous laws that are in place to deal with invasive species. The United States and international laws have addressed such questions in many cases, and similar efforts would need to be made to address potential damage or changes revived species could have on modern ecosystems.

Genetic modification is another question domestic and international lawmakers will need to consider, Torrance said. In the United States genetic modification is commonly accepted especially among crops such as corn and wheat, but it is not as freely accepted in other nations. International treaties such as the Cartagena Protocol allow nations to suspend normal trading rules to prevent genetically modified products from entering their country if they object to their presence. Such treaties would need to be considered for revived species, especially considering that many animals tend to migrate or spread across borders, Torrance said.

The first several generations of revived species would almost certainly be genetically modified by definition, he said, especially if scientists need to borrow DNA, even in small amounts, from species related to those being revived.

Torrance and colleagues will continue to craft scholarly articles and policy recommendations for consideration by lawmakers. The time to act is now, Torrance said, because the science will be in place eventually, whether the law is ready.

“I think law is at its worst when it’s reacting,” Torrance said.

By working together proactively, scientists, lawmakers and the public can craft regulations that would prevent many potential problems as well as avoid heavy-handed regulations that would stifle innovation.

“De-extinction is something we do need to regulate, but in proportion to the potential risk it could create,” Torrance said. “The law will react one way or another. I think it would be best if it reacts in a way that’s both beneficial to the science and public interest and in a way that keeps costs minimal.”

SCOTUS rules that human DNA cannot be patented

In what might be something of the Court trying to find a middle ground, justices did say something they create out of gene isolation could be patented making it a win for Myriad genetics – one of the players in this case – because they created a synthetic form of the genes.

Host Carmen Russell-Sluchansky spoke with Andrew Torrance, a law professor at the University of Kansas, and Dr. Caleph Wilson, of the Translation Research Unit and the Department of Microbiology at the University of Pennsylvania, to discuss the story.

 

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