The conventional explanation for why people seek patents draws on a simple economic rationale. Patents, the usual story goes, provide a financial reward: the ability to engage in supracompetitive pricing by excluding others from practicing the claimed technology. People are drawn to file for patents because that is how these economic rewards are secured. While scholars have proposed variations on the basic exclusionary mechanism, and there is a general acknowledgement that patents can affect a firm’s reputation, the actual mechanisms of patents’ effect on individuals—human beings—remains relatively uncharted. In this Article we offer a concrete theory and framework for understanding the relationship between patents and individuals in terms other than the lure of supracompetitive pricing. Our framework focuses on the idea of patents as credentials: formal abstractions of a person’s inventive nature. By acting as boundaries and identifiable indicators, patents serve purposes beyond the strictly exclusionary. One purpose is to satisfy social or self-worth needs. The formalization of invention through a patent allows those human beings who want to be recognized by society as inventors to be so recognized, thus fulfilling an innate human desire. A second purpose is economic—but not because of the power to exclude. Instead, as the literature has recognized on the firm level, viewing patents as credentials acknowledges their role as economic signals, indicating particular characteristics possessed by the recipient. Considered in these terms, patents serving as credentials are all around us, from resumes and curriculum vitae to framed patents in offices. But these examples only scratch the surface of the role of patents as credentials in our society. By using the formal lens of patents as credentials, we demonstrate that there are reasons why individuals seek patents beyond the lure of supracompetitive pricing.
Jason Rantanen & Sarah E. Jack
May 24, 2019