When hospitals come upon a technology with a proven track record of saving lives, you’d expect a flood of investment to expand its use, and a race by manufacturers to bring new products to market. Digital medical records, which give physicians quick and easy access to patients’ case histories, is an example of such a technology. Over the past dozen or so years, hospitals across the country have gone digital, leading to better patient outcomes and making hangar-size file-storage facilities obsolete. But even as more hospitals opted into using computer records, the leading vendors of picture storage software—an important component of medical records—completely stopped introducing new products to the market.
Why, precisely when the market for their product had just taken off, would companies stop innovating? An explanation comes from Catherine Tucker, an economist at MIT who has studied the medical IT sector. In an unpublished study, she shows that the slowdown in R&D occurred as a result of litigation by a company whose primary reason for existing is to acquire the rights to others’ inventions and file patent claims against producers of related products—a patent troll. Tucker’s study is, to date, one of the best pieces of quantitative evidence of the broken state of America’s patent system, a critical concern not just for improving health care but for encouraging the innovation that’s needed to ensure future economic prosperity.