Chicago's Museum of Science and Industry embodies America's heroic vision of science. Its space shuttle, U2 submarine, house-sized heart, and coal mine with a doomed animatronic canary are grand in scale and rich in meaning. The museum's exhibits depict triumphs of the highest virtues of our scientific history and technological present: equanimity, collaboration, and reverence for nature. Gazing into that rotunda as a child, one's choice comes down to a career of revelation or one of committed humanism; the drudgery of gel electrophoresis is only revealed years later.

The delineation between decrypting nature and fashioning it to meet needs is deeply rooted. Perhaps that is due to slogans filling museum rotundas; perhaps it is because our intellectual property regime partitions research along such lines. Either way, it is an imperfect intuition. Science and industry are tightly bound. Industry massively invests in basic research. Tenured researchers and government scientists spend much of their time, and generate much of their livelihood, attending to commercial interests. _{Even the quasi mystics of scientific history—the alchemists and string theorists—did science for the sake of very concrete, human goals.}

Science and industry, discovery and invention—these categories are not of science. They were not, at some critical moment, plucked from Platonic ether. They are deeply human and partial categories that reflect particular accounts of what we think we do when we do science, a legal system that relentlessly parses endeavors, and the contours of our political economy. The reality of science is far messier and far less categorical. The lines between research and application, between man's place in nature and study of nature, have ever defied glib summary. Entire disciplines study the sociology, history, and philosophy of science. How we think and write about science is a flashpoint because of what it may signal about weighty topics like truth and certainty. Most of these discussions take the form of academic abstraction, drawing popular attention only with high-profile Sokal Hoaxes or intermittent storms over the difference between scientific theory (say, regarding the descent of man through time) and scientific fact.

The cry to "improve patent quality" is heard anywhere patent lawyers gather and is a centerpiece of many of the political and academic establishments' major reform agendas. Indeed, although the modern patent system is entangled in policy disputes across a huge range of issues, the need to improve patent quality is essentially undisputed. This is, in a significant sense, unsurprising. Basic structural facts flag the issue quite clearly: as the amount of patenting activity has grown rapidly worldwide, the administrative apparatus of the patent system has been strained to its limits, raising urgent concerns about the viability of its basic mission of evaluating patentability. At the same time, the substantial costs of inappropriately granting large numbers of patents—uncertainty, additional litigation, and perversion of the incentives generated by patents themselves—are reasonably well understood. Despite the near-universal agreement surrounding the question of patent quality, relatively little attention has been paid to the mechanisms that support (and undermine) it. Improving patent quality is generally viewed as an administrative concern—a question of funding levels, regulatory process, bureaucratic reform, and so on. While there have been many interesting and innovative proposals for enhancing patent quality by reforming (even radically) the patent-prosecution process, less work has been done to identify the underlying mechanisms of patent quality.

What has largely been lost in this drumbeat for improved patent quality is that the modern patent system affirmatively encourages low patent quality—the incentives at work are such that we cannot reasonably expect anything other than very large numbers of low-quality patents. For this reason, virtually all of the proposed reforms directed to patent quality are doomed to fail; until we change the incentives (and change them quite significantly), the patent-quality problem will continue to grow.

In this Article, I suggest that only by understanding the mechanisms of patent quality—the incentive structure that not only discourages "good" patent behavior but also encourages "bad" patent behavior—will we make any real progress in improving the situation. Low patent quality, I argue, is not simply the problem of the U.S. Patent and Trademark Office (USPTO) and its counterparts worldwide, and no patent office can "fix" patent quality alone. Indeed, given the number of annual filings, it is hard to imagine any scenario in which enough resources could be directed toward this effort to have a meaningful impact. Instead, a serious effort to improve patent quality will need to address the reasons why patentees increasingly adopt a high-volume, low-quality patenting strategy, why litigation has become virtually the only reliable tool for determining a patent's scope and validity, and why memes such as "patent trolls" and "patent thickets" have become embedded in current legal-policy discourse.

Institutions are important to intellectual property. Information is a major subject of exchange, and the special challenges of contracting over information have long been at the heart of economic theories of contracting. Exchanges involving information are difficult because a buyer will be reluctant to make a purchase without knowing what he is buying, but once the seller reveals the information, the buyer will no longer need to pay for it. Contractors can also face challenges from asymmetric information, and some of the limits on people's ability to contract stem from the problems of incomplete information.

Where does this leave property? Although intellectual property is technically a form of personal property and some of its mechanisms are shared with regular property, commentators have found the notion of intellectual property problematic in a way that regular property is not. Because information itself is nonrival, in that one person's use of it does not diminish the value of another's use of the same information, excluding others from information when they could use it at zero marginal cost seems wasteful. And while intellectual property is one device among many that could provide incentives to people to create information, the nonrival nature of information is a count against intellectual property in comparison with rewards, kudos, lead times, and other alternatives to appropriating the returns from inventive and other creative activity. Should intellectual property be property at all?

In the last ten years of our "information age," the workload of the Patent and Trademark Office (PTO) has grown dramatically, increasing from 238,850 utility-patent applications in 1998 to over 460,000 in 2008. The flood of recent applications has thrust this previously obscure agency into the spotlight. The PTO faces an unenviable task. The volume of patent applications is obviously extremely large. At the same time, evaluating whether a patent should be granted is often a highly complex endeavor. Proper evaluation requires understanding not only the science in the area in which the patent is sought but also the manner in which the patent statute applies to the science. The patent statute itself sets out only a relatively skeletal set of standards regarding how patentability should be determined.

For all of these reasons, one might expect Congress to have established a highly muscular patent agency. This has not happened. Not only does the PTO lack substantive rulemaking authority, but the PTO's reviewing court, the Court of Appeals for the Federal Circuit, does not give any formal deference to legal decisions made by the agency in its statutorily authorized case-by-case adjudication.

Even in the face of all of these obstacles, the PTO has had some success in reforming substantive law in a manner that gives it more power in the decision-making process. The courts appear to have accepted, at least implicitly, the PTO's argument that these substantive reforms will help the agency manage its workload and improve the quality of the patents that it issues. In the 2005 case In re Fisher, the PTO succeeded in convincing the Federal Circuit of the validity of its heightened standard for evaluating the utility of patent applications. As a consequence, patentees cannot file applications until they have a "specific" and "substantial" use for their inventions. In 2006, the PTO worked with the Justice Department's Office of the Solicitor General to shape Supreme Court interest in and reform of the core patentability standard of nonobviousness. The result was the Supreme Court's 2007 decision in KSR International Co. v. Teleflex Inc., which has made it easier for the PTO to deny arguably "obvious" patents. In October 2008, the PTO was successful in leveraging the threat of Supreme Court intervention on the issue of patentable subject matter to secure from the Federal Circuit an en banc decision, In re Bilski, upholding the PTO policy of excluding from patentability processes that are not tied to a physical transformation or machine. Most recently, the PTO was able to rely on KSR and an earlier Supreme Court decision, Dickinson v. Zurko, which mandated significant deference to factual findings made by the PTO in the context of patent denials, to secure an April 2009 Federal Circuit victory with respect to the PTO's application of nonobviousness to DNA-sequence claims.

Since its inception in the Progressive Era, the modern administrative state has functioned in tandem with the three intellectual property doctrines enforced by the federal government—patent, copyright, and trademark law. Although administrative law and these intellectual property doctrines have shared a common provenance—defined, promulgated, and enforced through federal institutions, statutes, and case law—administrative lawyers did not discuss intellectual property, and intellectual property lawyers similarly did not discuss administrative law. Throughout the twentieth century, administrative law and intellectual property law seemed as if they were hermetically sealed off from each other in both theory and practice.

In recent years, the self-imposed segregation between these two legal regimes has finally broken down. In the 1990s, legal scholars began to explore the doctrinal and institutional relationships between patents and the administrative state, and some patent scholars have since called for a theoretical reframing of patent doctrine "through the lens of regulation." In 1999, the Supreme Court seemed to agree with this growing cadre of academic scholarship, concluding in Dickinson v. Zurko that the Administrative Procedure Act applies to the Federal Circuit's review of the regulations promulgated by the Patent and Trademark Office (PTO). In its March 2009 decision in Tafas v. Doll, the Federal Circuit took another step toward integrating patent law with the administrative state, applying Chevron deference to the PTO's procedural rulemaking. However, the fractured panel decision virtually guarantees further appellate litigation (both a petition for rehearing en banc and a certiorari petition to the Supreme Court). Regardless of the outcome in the appeals process, there will be substantial litigation on remand as well.

As statutory schemes go, the patent statute has been relatively stable from 1952 to the present. In contrast to copyright law, where Congress has taken a close—indeed at times intense—interest in the details of the statutory scheme, legislative intervention into the patent statute, when it has occurred, has been more limited and narrower in scope. For many reasons, however, patent law has been disequilibrating over time, and calls for patent reform have been increasing in intensity. One of the many factors contributing to this disequilibration in recent years has been the ongoing emergence of the U.S. Patent and Trademark Office (PTO) as a more robust institutional player actively seeking to influence patent policy. The more prominent role played by the PTO is both a cause and an effect of dissatisfaction with the state of patent law.

In order to better understand some of the forces behind the moves toward patent reform, we should examine not just who is demanding legal change, but which institutions are able and willing to supply legal rules and norms. Since 1952, Congress has left much of the market for supply-side influence in patent law to the federal courts and, to a lesser degree, to the PTO. In 1982, Congress consolidated appellate jurisdiction over patent cases in one court, the U.S. Court of Appeals for the Federal Circuit. Since then, lacking institutional competition from other courts, the Federal Circuit has strengthened patent law. In the process, the court has made this a more attractive area for institutions to wield legal and policy influence.

Complaints about frivolous patent suits abound in academic, business, and policy circles. The focus of the problem is the tendency of businesses, both large and small, to find themselves having to defend against large numbers of lawsuits over junk patents that have issued from the Patent Office but that are actually invalid—a death by a thousand pin pricks created by the lure of occasional high damages awards in cases adjudicated to involve infringement of valid patents. The underlying cause is said to be the relatively modest examination that the Patent Office gives to the vast majority of patent applications before they are issued as patents. In decision-making terminology, the problem is seen as a screening process that is underinclusive.

In response, most popular proposals are directed at ways to segregate patents into two or so bundles, based on whether the patents should be subject to more scrutinizing examination procedures. A so-called "second window of review" has been proposed to let competitors make the choice of which patents get closer examination; a so-called "gold-plated approach" has been proposed to allow patentees to make the election. Both proposals are on top of significant recent changes that have occurred in the underlying substantive criteria for assessing patentability through cases like the KSR International Co. v. Teleflex Inc. decision on obviousness and the In re Bilski decision on permissible subject matter.

One fundamental shortcoming of these approaches is that they do not adequately consider the information costs, error costs, and risks of political capture that accompany any system premised on flexible and discretionary administrative review. The extensive scrutiny they impose leaves some patent applications tied up in the administrative process for too long and some patent applications unduly rejected. A new problem has crept in: the screening process has become overinclusive. Indeed, the system now is both underinclusive, in allowing too many low-quality patents, and overinclusive, in erecting too many barriers to patents. In addition, an administrative stacking problem arises as these enhanced procedures are piled on top of the increased flexibility already injected into the substantive criteria for patentability by recent changes in case law. This combination leaves the system vulnerable to too much flexible discretion, exposing flexibility's Achilles' heel. Flexibility increases the discretion of government bureaucrats, which has the effect of increasing uncertainty rather than decreasing it, and gives a built-in advantage to large companies with hefty lobbying and litigation budgets by making it much easier for them to tie up any patent owned by a smaller innovator. Moreover, these heightened costs of administrative process are imposed without the benefits that generally motivate the case for administrative agencies: the need for judgment calls by leadership.

Fan fiction and remix culture have been and are continuing to explode both in terms of social relevance and sheer quantity of new works produced and available. Fan fiction is simply that: fiction created by fans, typically of popular commercial works, such as the Harry Potter book and film series. Rebecca Tushnet's path-setting article defines fan fiction as follows: "'Fan Fiction,' broadly speaking, is any kind of written creativity that is based on an identifiable segment of popular culture, such as a television show, and is not produced as 'professional' writing."

Suntrust Bank v. Houghton Mifflin Co. could be called the first fan-fiction case, but Alice Randall, the author of the parody at issue in Suntrust, is better described as an antifan of Gone with the Wind. The case turned on a defense of criticism and parody, not specifically on the fanlike nature of the work. However, if Randall's book counts as fan fiction, then it is not the case that there is no settled fan-fiction case law, a claim that sometimes has been made.

As technology has advanced, fan fiction has evolved into "fanworks" or, alternatively, "fanvids." A related but more general term is "remix." The term "remix" avoids the suggestion that the new works are produced by fans of the underlying works. Lawrence Lessig gives examples of remix works that are highly critical of the works drawn upon in the remix. Lessig does not define the term "remix" in his new book, despite its title. He does, however, note that remix works are "transformative." He also equates remix with literary quotation. There is a tension here, however, as a work is not necessarily transformed simply by adding a quotation from another work. Additionally, there is ambiguity because Lessig is not explicit as to whether he intends to use the term "transformative" in its legal sense, namely, in reference to factor one of the fair use test. The question is pertinent as there is a movement to develop the concept of transformative use that appears not to limit itself to the legal sense of this word. The definitional expansion of the term "transformative use" beyond its legal origins would complement Lessig's larger agenda, which includes bypassing fair use altogether when it comes to the legal treatment of amateur remix.

Judging from the headlines, it appears that copyright law is in an existential crisis. Broadband networks and digital applications have widely expanded unlicensed access to copyrighted content. Consumer-to-consumer dissemination over file-sharing networks increasingly bypasses traditional segments of the copyright market. Despite the deployment of a wide array of scare tactics, professional distributors have failed thus far to reverse file sharing and copyright circumvention.

Two paradigms exist to analyze the existential crisis facing copyright law: the political-economy model and the technological paradigm. In the political-economy model, the death of copyright law is caused by legislative and judicial capture by copyright owners, which negates the original, true meaning of copyright law. The technological paradigm argues that digital technology has rendered copyright law hopelessly obsolete or, from the entertainment industry's viewpoint, dangerously ineffective. Commentators argue that "digital copyright" requires a type of governance different from the historical straitjacket of copyright law. Interested parties disagree on the appropriate direction of copyright law: namely, does new technology require a stronger legal hold on copyrighted content or does digital technology present an opportunity to release cultural goods from the shackles of copyright law?

With every court decision or appeal to Congress, the debate over the proper adjustment of copyright law becomes further polarized. At one end, we find the entertainment industry, while on the other end we have consumers, scholars, and civil libertarians. The former argues that the entertainment industry will not survive unless intellectual property laws are strengthened to meet the threat of new technologies and the widespread theft that occurs over the Internet. The latter maintain that new technology presents opportunities for unprecedented cultural exchange, suggesting that existing legal and institutional arrangements reduce economic welfare by strangling technological progress. At regular intervals, both sides present their arguments before the Supreme Court. Meanwhile, the copyright tug of war attains iconoclastic dimensions.

Legal scholarship on the economics of copyright has largely settled into a debate between two polar extremes. On one side are copyright "neoclassicists," who favor the expansion of copyright protection until it encompasses all of the present and future uses associated with a creative work, as well as reforms that facilitate price discrimination, on the grounds that innovation is best promoted if authors are able to appropriate as much of the value of their creation as possible. On the other side are copyright "minimalists," who favor limiting the number of uses contained within a copyright so that it provides only enough incentive for innovation and who are generally hostile toward reforms that facilitate price discrimination.

Despite the differences in their conclusions, both sides generally frame the arguments in largely economic terms. Indeed, both sides of the debate analyze copyright through the lens of public goods theory, which Paul Samuelson was among the first to analyze with mathematical rigor. A core policy implication of public goods theory is that markets tend to produce too few public goods and underutilize those that are produced. In the context of copyright, the economic analysis has focused almost entirely on the premise that not only are creative works nonrival in general, but also that any number of additional copies can be produced at zero marginal cost. In so doing, the current literature fails to capture the key economic features that give public goods their distinctive characteristics.