The Power of Distant Rewards: Driving International Innovation Through United States Patent Incentives

Technological innovation outside the United States is increasing. The United States remains the largest single source of new inventions, but the rest of the world produces most technological advances. Yet, even as innovation capacity outside the United States grows, the production of advances remains underincentivized in many developed and developing countries. Weak incentives apply to the outlier advances that are the province of patent laws.

These outlier advances—typically reflecting material departures from prior technical knowledge and potentially establishing fundamentally new lines of technological development and consumer products—are particularly important components of technological development. By shortchanging incentives for outlier advances, society hinders the pace and scope of technological advancement. Talented innovators located outside the United States too often look to home country patent laws for invention rewards and incentives. This results in weak incentives and undesirably low levels of technological innovation regarding the types of outlier advances addressed by patents.

This article explains the inadequacy of many home country patent laws to incentivize innovation by inventors working outside the United States. It argues that inventors across the world should look to United States patent laws for their primary invention rewards. Such a strategy will not only spur additional funding and institutional backing for research worldwide, but will increase the likelihood that more outlier technologies will be created to the benefit of parties in the United States and throughout the world.