Our patent system seeks to promote innovation. When it comes to levering incentives in the service of innovation, property rights flowing from patent grants do much of the expected work.
The Supreme Court's 2012 Mayo v. Prometheus decision disrupted the existing status quo and articulated a new legal test for patent-eligible subject matter. Assessing Mayo's impact in general and on molecular diagnostics innovation in particular confronts considerable data and research design challenges.
Arti Rai (Duke) et al. take up this challenge in a recent paper, Molecular Diagnostics Patenting after Mayo v. Prometheus: An Empirical Analysis. As the authors make clear, "in an ideal world, we would be able to examine rigorously differences in molecular diagnostics innovation before and after Mayo. Unfortunately, the rigorous measurement of innovation raises well-known challenges.” Despite these (and other) challenges, the paper uses data on molecular diagnostic patenting from 2009 through 2019. The paper's DID specifications exploit comparisons with non-bioinformatics and non-molecular diagnostic biochemistry inventions. The paper reports mixed results summarized in the excerpted abstract that follows.
"This Article contributes to the presently thin evidence base on the impact of Mayo by using data on patent applications, examinations, and grants from 2010-2019 to comprehensively trace the effects of the test and subsequent related developments. Using descriptive data as well as a difference-in-difference (DID) design, we evaluate the extent to which the decision was followed by one of three expected outcomes: a decline in patent quantity and quality (“retrenchment”); increase in patent prosecution “toughness”; and applicant “adaptation.” We find substantial support for our toughness and adaptation hypotheses, but not our retrenchment hypothesis: molecular diagnostic patenting did not decline in aggregate, though there is some evidence of a relative decline among small, U.S. based firms as well as a potential decline in the share of patents covering new (non-continuation) inventions. These results suggest that molecular diagnostic patents are harder to get but they are still being applied for and granted, with their narrowed scope making them less likely to block follow on innovation.”
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