Social innovation.

• Author: Lee, Peter
• Position: Introduction through II. Innovation within and Beyond the Patent Paradigm, p. 1-42

ABSTRACT

This Article provides the first legal examination of the immensely valuable but underappreciated phenomenon of social innovation. Innovations such as cognitive behavioral therapy, microfinance, and strategies to reduce hospital-based infections greatly enhance social welfare yet operate completely outside of the patent system, the primary legal mechanism for promoting innovation. This Article draws on empirical studies to elucidate this significant kind of innovation and explore its divergence from the classic model of technological innovation championed by the patent system. In so doing, it illustrates how patent law exhibits a rather crabbed, particularistic conception of innovation. Among other characteristics, innovation in the patent context is individualistic, arises from a discrete origin and history, and prioritizes novelty. Much social innovation, however, arises from communities rather than individual inventors, evolves from multiple histories, and entails expanding that which already exists from one context to another. These attributes, moreover, apply in large part to technological innovation as well, thus revealing how patent law relies upon and reinforces a rather distorted view of the innovative processes it seeks to promote. Moving from the descriptive to the prescriptive, this Article cautions against extending exclusive rights to social innovations and suggests several nonpatent mechanisms for accelerating this valuable activity. Finally, it examines the theoretical implications of social innovation for patent law, thus helping to contribute to a more holistic framework for innovation law and policy.

TABLE OF CONTENTS INTRODUCTION I. SOCIAL INNOVATION A. Characterizing Social Innovation B. Case Studies 1. Cognitive Behavioral Therapy 2. Microfinance 3. Combating MRSA II. INNOVATION WITHIN AND BEYOND THE PATENT PARADIGM A. Knowledge Assets and Public Goods B. Individuals and Communities C. Discrete Invention and Historical Evolution D. Novelty Versus Extending What Has Already Worked E. Invention Versus Implementation, Replication, and Extension F. The Charismatic Entrepreneur G. Toward a More Holistic Conception of Innovation III. ACCELERATING SOCIAL INNOVATION A. The Inappropriateness of Exclusive Rights B. Funding 1. Government Grants and Social Capital Markets 2. Inducement Prizes 3. Crowdfunding C. Infrastructure, Networks, and Incubators D. Organizational Extension and the Theory of the Firm E. Harnessing User Innovation and Commons-Based Peer Production IV. TOWARD A MORE HOLISTIC FRAMEWORK FOR INNOVATION LAW AND POLICY A. Enhancing Technological Innovation in Light of Social Innovation B. Pluralizing Conceptions of Innovation and Serving Distributive Values CONCLUSION INTRODUCTION

Cognitive behavioral therapy (CBT), a set of psychological techniques for combatting depression, anxiety, and other conditions, has lifted millions of people from the depths of mental illness. Microfinance, the practice of making small, unsecured loans to indigent borrowers, has helped move significant numbers of individuals out of poverty. Changes to physician attire-such as not wearing neckties-have substantially reduced the incidence of methicillin-resistant Staphylococcus aureus (MRSA) infections in hospitals, saving thousands of lives every year. Although these developments are quite different, they all share two important characteristics. First, they reflect immensely valuable "social innovations" that apply new ideas and practices to address pressing social problems. Second, they all arose completely outside of the patent system, the primary legal mechanism for promoting innovation.

Although the Constitution authorizes a patent system "[t]o promote the Progress of Science and useful Arts," (1) entire swaths of useful arts fall outside the domain of patent protection. This Article extends beyond patent law's traditional focus on technological innovation to consider a broader conception of social innovation and how legal mechanisms may (or may not) encourage it. Social innovations are immensely important yet understudied; (2) innovations as diverse as emissions trading, kindergarten, and nationalized healthcare have literally transformed society. (3) This Article seeks to explore this significant kind of innovation as well as its divergence from the classic model of technological innovation championed by the patent system. Additionally, it proposes various strategies to accelerate social innovation. Finally, it considers the theoretical implications of social innovation for patent law, thus helping to contribute to a more holistic framework for innovation law and policy.

At a descriptive level, this Article represents the first legal examination of the immensely valuable but underappreciated phenomenon of social innovation. While acknowledging the inherent difficulty of defining social innovation, this Article shows how innovations such as CBT, microfinance, and strategies to reduce MRSA infections are "social" in that they serve public objectives, are intended for wide application, and involve changes to human behavior and relationships. It also compares and contrasts social innovations with other domains of "innovation without IP" that have attracted significant scholarly attention, from academic science to the fashion industry. (4)

In exploring social innovation, this Article highlights and challenges the narrow, particularized conception of innovation embedded in patent law. Among other characteristics, innovation in the patent law context is individualistic, discrete, novel, and objectively reproducible. Much social innovation, however, arises from communities rather than individual inventors, emerges from multiple histories, entails expanding existing practices, and faces significant challenges of reproducibility. This Article further argues that notwithstanding patent law's particular conception of innovation, these dynamics often apply as well to processes of technological development traditionally protected by the patent system. In applying its narrow and particularistic conception of innovation, patent law thus obscures and rewrites the innovative processes it seeks to promote.

Before proceeding, several terminological and methodological notes are in order. First, this Article uses the term "innovation" rather than "invention" to describe novel creations that serve social needs. Traditional patent parlance distinguishes between "invention," which refers to creating a new technology, and "innovation," which entails all of the processes of developing that technology into a commercial product. (5) However, within the literature on social innovation, the term "innovation" intrinsically encompasses not just the creation of a new idea but its implementation. The term "invention," thus has little meaning in the social innovation context, for ideas without practical application have no social value. Second, this Article focuses primarily on social innovations rather than the entrepreneurs who champion them or the enterprises that give them institutional form. (6) While this Article will certainly address social entrepreneurs and enterprises, its emphasis on the innovations themselves will offer the cleanest comparison to the inventions that fall within the realm of patent protection. Third, although this Article focuses on social innovation, it posits no sharp distinction between this field of creativity and more traditional forms of technological innovation protected by the patent system. Indeed, this Article argues that underlying innovation dynamics are often generalizable across many overlapping contexts. As such, labels signifying "social" and "technological" innovation reflect differences of emphasis and degree rather than fundamental differences of kind.

Turning from the descriptive to the prescriptive, this Article proposes several mechanisms for accelerating social innovations. In so doing, it helps fill a significant gap in the literature, for "[w]hile national strategies abound to support innovation in business and technology, no comparable strategies at the national level exist to understand and support social innovation." (7) In so doing, it draws upon a rich body of scholarship comparing the relative merits of exclusive rights, public funding, prizes, and other inducement mechanisms to promote innovation. (8) Although it argues against extending formal intellectual property rights to social innovations, this Article applies several IP-related insights for promoting such innovation. In particular, it argues that public and private funding, robust social capital markets, and strengthened infrastructure can significantly accelerate social innovation. It further draws from the theory of the firm to suggest organizational strategies for spreading social innovations, and it argues for harnessing the power of user innovation and commons-based peer production to promote this valuable activity. In reciprocal fashion, this Article shows that social innovation has much to teach policy makers about accelerating more traditional types of technological innovation. In particular, it argues that technology law and policy should focus more on fostering communities of creativity, providing productivity-enhancing infrastructure, and funding not just invention, but the implementation, replication, and extension of existing technologies.

At a theoretical level, this Article advances two related critiques of the patent system in laying a foundation for a more holistic innovation law and policy framework. First, it argues that patent law reflects-and scholarly discourse has adopted-a rather crabbed, narrow conception of innovation. Patent law's pervasive focus on discrete inventorship, novelty, and traditional categories of technology neglects other significant expressions of human ingenuity. Although semiconductors and pharmaceuticals are clearly valuable (and other patentable...