Scientific Validity and Error Rates: A Short Response to the PCAST Report

This Article was prepared as a companion to the Fordham Law Review Reed Symposium on Forensic Expert Testimony, Daubert, and Rule 702, held on October 27, 2017, at Boston College School of Law. The Symposium took place under the sponsorship of the Judicial Conference Advisory Committee on Evidence Rules. For an overview of the Symposium, see Daniel J. Capra, Foreword: Symposium on Forensic Testimony, Daubert, and Rule 702, 86 Fordham L. Rev. 1459 (2018)

Patent reform: a mixed blessing for the U.S. economy?

The 1980s represented a period of dramatic change in the design and enforcement of U.S. intellectual property law. Many of these changes were adopted in the hopes of stimulating private research and development and improving the technological competitiveness of American industries. This article examines the effects of an especially important aspect of these changes: many more inventions qualify for patent protection than before. While it seems logical that making patents easier to obtain will encourage more inventive activity, economic analysis reveals this is not always true, and it is less likely to be true in industries that innovate rapidly.Patents

Economics and the design of patent systems

The author uses intuition derived from several of his research papers to make three points. First, in the absence of a common law balancing test, application of uniform patentability criteria favors some industries over others. Policymakers must decide the optimal tradeoff across industries. Second, if patent rights are not closely related to the underlying inventions, more patenting may reduce R&D in industries that are both R&D and patent intensive. Third, for reasons largely unrelated to intellectual property, the U.S. private innovation system has become far more decentralized than it was a generation ago. It is reasonable to inquire whether a patent system that worked well in an era of more centralized innovation functions as well for the more decentralized environment of today.

Matching externalities and inventive productivity

This paper generalizes and extends the labor market search and matching model of Berliant, Reed, and Wang (2006). In this model, the density of cities is determined endogenously, but the matching process becomes more efficient as density increases. As a result, workers become more selective in their matches, and this raises average productivity (the intensive margin). Despite being more selective, the search process is more rapid so that workers spend more time in productive matches (the extensive margin). The effect of an exogenous increase in land area on productivity depends on the sensitivity of the matching function and congestion costs to changes in density.

Patentability, industry structure, and innovation.

To qualify for a patent, an invention must be new, useful, and nonobvious. This paper presents a model of sequential innovation in which industry structure is endogenous and a standard of patentability determines the proportion of all inventions that qualify for protection. There is a unique patentability standard, or inventive step, that maximizes the rate of innovation by maximizing the number of firms engaged in R&D. Surprisingly, this standard is more stringent for industries disposed to innovate rapidly. If a single standard is applied to heterogeneous industries, it will encourage entry, and therefore innovation, in some industries while discouraging it in others. The model suggest a number of important implications for patent policy.Patents ; Industries

The development and regulation of consumer credit reporting in America

In the United States today, there is at least one credit bureau file, and probably three, for every credit-using individual in the country. Over 2 billion items of information are added to these files every month, and over 2 million credit reports are issued every day. Real-time access to credit bureau information has reduced the time required to approve a loan from a few weeks to just a few minutes. But credit bureaus have also been criticized for furnishing erroneous information and for compromising privacy. The result has been 30 years of regulation at the state and federal levels. ; This paper describes how the consumer credit reporting industry evolved from a few joint ventures of local retailers around 1900 to a high technology industry that plays a supporting role in America's trillion dollar consumer credit market. In many ways the development of the industry reflects the intuition developed in the theoretical literature on information-sharing arrangements. But the story is richer than the models. Credit bureaus have changed as retail and lending markets changed, and the impressive gains in productivity at credit bureaus are the result of their substantial investments in technology. ; Credit bureaus obviously benefit when their data are more reliable, but should we expect them to attain the socially efficient degree of accuracy? There are plausible reasons to think not, and this is the principal economic rationale for regulating the industry. An examination of the requirements of the Fair Credit Reporting Act reveals an attempt to attain an appropriate economic balancing of the benefits of a voluntary information sharing arrangement against the cost of any resulting mistakes.Consumer credit

You can patent that? Are patents on computer programs and business methods good for the new economy?

In other parts of the economy, firms are increasingly turning to patents to protect not just physical inventions but more abstract ones such as computer programs or ways of doing business. Just two decades ago such patents would have been impossible to obtain, let alone enforce. In "You Can Patent That? Are Patents on Computer Programs and Business Methods Good for the New Economy?" Bob Hunt describes the changes in patent law that have given rise to this phenomenon.Patents ; Computers

What's in the file? The economics and law of consumer credit bureaus.

In "What's in the File? The Economics and Law of Consumer Credit Bureaus," author Bob Hunt points out that lenders in the United States have voluntarily shared information about their customers - through credit bureaus - for nearly a century. Hunt explains how sharing information about consumers' indebtedness and payment histories can benefit both consumers and lenders. These benefits depend, however, on the accuracy of the information reported and the care taken to ensure that information is disclosed only when appropriate. Hunt also describes the Fair Credit Reporting Act, which attempts to address these concerns. He closes by reviewing a number of challenges consumer credit bureaus may face in the early years of this new century. ; Also issued as Payment Cards Center Discussion Paper No. 02-06Credit bureaus ; Consumer credit

Ten years after: What are the effects of business method patents in financial services?

In recent years, the courts have determined that business methods can be patented, and the United States Patent and Trademark Office has granted some 12,000 patents of this sort. Has the availability of patents for business methods increased the rate of innovation in the U.S. financial sector? The available evidence suggests that there has been no significant change in the aggregate trend of R&D investments made by financial firms. In "Ten Years After: What Are the Effects of Business Method Patents in Financial Services?," Bob Hunt discusses how recent court decisions and proposed federal legislation may change how firms enforce their patents. In addition, he outlines some of the remaining challenges that business method patents pose for financial companies.Patents