Nicholas Short. 2022. Studies in American Political Development 36(1): 41-60.

The American knowledge economy (AKE) is not a foreordained transition in the organization of economic production, nor is it a form of political economy shaped predominately by the political demands of highly educated workers. It is a politically generated consensus for producing economic prosperity and economic advantage over other nations in which intellectual property (IP), and the businesses that produce it, play a leading role. The history of AKE development reveals as much. In the AKE’s formative period, from 1980 to 1994, IP producers and a faction of neoliberal Democrats (the “Atari Democrats”), not decisive middle-class voters, played a pivotal role in reconfiguring institutions of American political economy to hasten the AKE transition. Their vision of AKE development inherently complicated the Democratic Party’s attitude toward rising market power and continues to shape contemporary disputes within the party over antitrust enforcement and the validity of the AKE project itself.

peer-reviewed publication | article link

Josh Lerner, Amit Seru, Nick Short & Yuan Sun. Journal of Political Economy 132(5): 1391-1449.

We explore the evolution of financial innovation, using 24,000 U.S. finance patents applied for and granted over last two decades. Patented financial innovations are substantial and economically important, with annual grants expanding from a few dozen in the 1990s to over 2000 in the 2010s. The subject matter of financial patents has changed, consistent with the industry’s shift towards household investors and borrowers. The surge in financial patenting was driven by information technology and other non-financial firms. The location of innovation has shifted, with banks moving activity away from states with tight financial regulation. Concurrently, high-tech regions have attracted financial innovation by payments, IT, and other non-financial firms. Analyses of the returns to financial patents suggests that the social value of these innovations are higher than their private value. We present a simple model to explain these trends. The changing dynamics of financial innovation that began in the 1980s and 1990s may have lowered the private returns to innovation and increased the desirability of patent protection for financial innovations. Regulation of banks following the financial crisis of 2007 may have raised the costs of innovation, leading them to invest less in such activity.

peer-reviewed publication | article link

Nicholas Short, Elliott Ash, and Mirko Draca. Working paper in progress.

Recent studies suggest that historical patterns of federal spending played a significant role in shaping knowledge economy development in the United States. We test this hypothesis in the context of the Reagan era defense buildup. We used detailed defense procurement data to construct a Bartik instrument of predicted procurement growth at the county-level and estimate the effect of procurement growth on innovation. We find that defense procurement growth arising from the Reagan buildup has significant and lasting effects on innovation. Defense procurement growth also has strong causal effects on regional economic development, but the long-run effects on innovation arise predominately from growth in the number of inventors. These findings support the view that federal spending plays an important role in forming and accelerating the development of the nation’s innovation hubs.

working paper | article in progress

Nicholas Short. 2016. Fordham Intellectual Property, Media, and Entertainment Law Journal 26(3): 573-623.

This Article approaches the research exemption, and related legal developments, as a case study in the political economy of patent law. Part I recounts the history of the research exemption, touching briefly on historical origins but emphasizing developments since the 1970s in legislative, executive, and judicial forums. It also examines changes during the same time frame in related areas of patent law, like the Bayh-Dole legislation and the attempted repeal of state immunity from patent infringement liability. These legal developments indirectly affected the research exemption, or implicated similar concerns about imbalance in the patent system and the use of patents to tax, control, or inhibit research activity. Part II analyzes this history to illustrate and expand upon two major themes in the political economy of patent law, namely the surprising persistence of faulty economic ideology in patent policymaking and the institutional bias exhibited by the Court of Appeals for the Federal Circuit in shaping modern patent law. One major conclusion is that together these forces have created an excessively complex and ill-designed policy environment that is placing a significant strain on the national research system, a strain that executive agencies and the courts have tried to alleviate through ad hoc agreements and modifications of other patent doctrines, like the doctrine of subject matter eligibility.

law review article | article link

Nicholas Short. 2016. Michigan Journal of Law Reform Caveat 50(1): 1-17.

On March 20, 2015, Robert Kastenmeier, who represented Wisconsin’s Second Congressional District from 1959 to 1991, passed away at his home in Arlington, Virginia. Though Kastenmeier may not have been well known outside of legislative circles and his home state of Wisconsin, he was in fact one of the most prolific policy makers—if not the most prolific policy maker—in the field of intellectual property law in the 20th century. He is impressively credited with authoring more than forty-eight laws dealing with intellectual property matters during his legislative tenure, including the Copyright Act of 1976, which remains the primary legal framework for copyright law in the United States. 

One of the last bills that Kastenmeier introduced in the House of Representatives was a major piece of patent reform legislation dubbed the Patent Competitiveness and Technological Innovation Act of 1990 (PCTIA). Kastenmeier introduced the bill on September 20, 1990, but left office less than four months later on January 3, 1991, after losing an election to Scott Klug. The PCTIA contained five separate titles, and dealt with subjects as varied as the patentability of inventions made in outer space to the repeal of state sovereign immunity from infringement liability. One of those titles, Title IV, garnered little attention at the time, but addressed a subject of tremendous importance today: the need to codify and strengthen the long-standing common law research exemption in American patent law. 

I have written elsewhere about the political economy of the research exemption in American patent law from 1970 to the present day, with an emphasis on analyzing the political coalitions that have historically argued in favor of or against such exemptions, and the economic arguments they often invoke. The purpose of this article, in contrast, is to carry forward the torch that Kastenmeier lit, and argue in favor of codifying a robust research exemption. To that end, section two briefly explains how the law pertaining to research exemptions has developed since 1970, with an eye towards understanding what these developments mean for policy makers. Section three summarizes the findings of relevant survey evidence and statistical studies. Section four critiques several scholarly proposals for a research exemption or proposals that attempt to accomplish similar ends through different means, like the proposal for creating a “fair use” exception in patent law, or for modifying the Bayh-Dole Act to give federal funding agencies more discretion when determining whether the results of publicly-funded research should be patented. Section five concludes by summarizing the basic argument in favor of the Robert Kastenmeier Memorial Act, a new bill to codify a robust research exemption in American patent law.

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