What Do Blitz, Bic, and DuPont have in common? Blitz U.S.A. declined to add flame arrestors to its gasoline cans, despite severe injuries from explosions. Bic led the lighter market but withheld childproof designs. DuPont identified health risks in its PFOA products but opted against safer disposal methods. The reason these injurers failed to implement socially desirable safety innovations in their products was allegedly to avoid the liability risks associated with these changes. By not implementing them, they were able to evade liability, either because the harm to consumers remained unknown outside the company or because, in the absence of knowledge about the innovative safety device they chose not to develop, the product was considered legally not defective.
The problem exemplified in all these cases is that, at times, tort law provides tortfeasors with incentives to hide innovation, because implementing a safety measure can reveal a safety problem that would otherwise remain hidden.
The solution is, of course, simple: introduce patent law, enabling injurer-innovators to patent their innovations and charge everyone, including their competitors!, royalties. After all, isn’t that the point of patent law? Isn’t it a straightforward solution to the problem?
Indeed, it seems simple, but it is wrong.
In Anti-Patents, Roy Baharad, Stuart Minor Benjamin, and Ehud Guttel (BBG) persuasively demonstrate that even when tortfeasors can benefit from the innovation by patenting it and charging royalties to their competitors, they will not necessarily innovate. This is because innovating safety measures will require them to implement this innovation themselves, and sometimes the cost of developing and implementing the safety measure outweighs the benefits from royalties.
In this article, recently published in the University of Chicago Law Review, BBG tackle the often-overlooked relationship between patent and tort law, illuminating what they call the “injurer-innovator problem.” Patent law rewards innovation, enabling inventors—who are often responsible for potential harms—to profit through exclusive rights. Tort law, however, compels these same “injurers” to bear the cost of implementing innovations for harm prevention. This dynamic creates a paradox: companies, wary of liability costs, sometimes avoid socially beneficial innovations that other innovators (who are not also injurers) would have pursued and profited from.
BBG propose the anti-patent as a groundbreaking solution. Unlike a traditional patent, which grants exclusive rights to use or license an invention, an anti-patent status exempts the inventor from mandatory implementation. This framework allows the inventor, but only the inventor, to profit through licensing without facing the cost and legal obligation of self-implementation and without the risk of liability from not adopting the invention. As a result, anti-patents could encourage companies to disclose innovations rather than hide them due to potential liability costs, fostering safer, progressive technology in fields such as pharmaceuticals, manufacturing, and environmental safety.
BBG support their proposal by comparing the anti-patent mechanism to alternatives like government subsidies, grants, or tax incentives for the development of innovative safety measures. They argue that these approaches often lack the precision and effectiveness that an anti-patent framework can provide. To address concerns about alleged unfairness—particularly that victims of the injurer-innovator will not be compensated and that the industry will operate under two different standards—BBG compare anti-patents to whistleblower protections and grandfathering rules. These rules create exemptions from ordinary legal standards for the socially valuable purpose of driving the disclosure of valuable information to the public.
By exempting whistleblowers from retaliation, the law encourages the revelation of critical information, just as anti-patents would encourage injurers to disclose and license new safety technologies without incurring the cost of implementing them personally. Similarly, grandfathering rules allow entities to continue operating under old standards after new regulations are imposed, provided that such exemptions serve public welfare. Anti-patents would function similarly by allowing injurer-innovators to retain for their own products the prior standards, thus reducing the financial burden of innovation while promoting societal benefits through licensing.
Still, even though whistleblower rules sometimes allow wrongdoers to profit and grandfathering laws permit the industry to operate under multiple standards, isn’t it especially undesirable that victims of the injurer-innovator are the only ones who do not receive compensation for their harm? In reply BBG could say that it is not entirely clear how significant the problem is because, once competitors start offering safer products, many consumers will switch to them. This could lead our injurer-innovator to implement its own safety innovation to avoid losing customers.
However, to be on the safe side, BBG suggest that the government reward injurers who adopt safety innovations, offsetting the costs of implementing these changes and, crucially, alleviating the liability burden. This subsidy approach would, in theory, make it more financially feasible for injurer-innovators to adopt and apply safety technologies without incurring the burden of significant liability expenses. If this works well, we should see more socially desirable safety innovations come to fruition, without placing the burden on the victims.
However, if consumers would switch to the safer products offered by competitors, perhaps our own injurer-innovator will refrain from developing the safety measure after all, especially if government subsidies are not guaranteed. Indeed, the paper could benefit from further exploration of market dynamics. For instance, wouldn’t “forcing” competitors to implement costly safety measures (by developing safety measures that only the competitors have to implement) increase rivals’ costs and raise antitrust concerns?
Overall, BBG’s proposal is thought-provoking and addresses a significant issue at the intersection of patent and tort law. It presents a compelling approach that encourages advancements contributing to public safety and welfare. By rethinking how these legal frameworks interact, the proposal holds promise for fostering innovation while also protecting the interests of consumers.
