Fracking Patents Working Paper Available

My latest working paper — Fracking Patents: The Emergence of Patents as Information Containment Tools in Shale Drilling — is now available on SSRN.

The paper is a collaboration with Dan Cahoy, Associate Professor of Business Law at Penn State’s Smeal College of Business and Zhen Lei, Assistant Professor of Energy and Environmental Economics at Penn State’s College of Earth and Mineral Sciences.

In general, patents are viewed as a positive force, providing a vehicle for disseminating information in exchange for a limited property right over an invention. However, we make an alternative claim: patents can also be used to control the creation of new information by limiting the evaluation of an invention by third parties.

We argue that such control is more likely in situations where third-party use and assessment may produce information damaging to the patent owner. In particular, we explore the relationship between patents and information control in the context of natural gas extraction.

We show that substantial growth of patents in hydraulic fracturing, the technology used to extract gas from the widely discussed Marcellus Shale in the eastern United States, occurs simultaneous with the emergence of related concerns. In light of this insight, we explain how patents on hydraulic fracturing fluids could potentially be used to prevent testing by third parties. Analogies in agricultural biotech and genetic treatments are used to support these claims.

An understanding of the role of patents as information control mechanisms is critical to the safe employment of new technology. If patents substantially limit information creation or disclosure, government intervention to permit experimental use and environmental, health and safety testing may be necessary. However, options do exist under current law that should be considered before patent rights are encumbered.