Recent Paper: Does Tort Law Deter Innovation?

At MassTortDefense, we from time to time point out an interesting academic take on the issues we deal with in the litigation trenches. Readers may want to check out "Torts and Innovation," a thought provoking article by Gideon Parchomovsky, University of Pennsylvania Law School, and Alex Stein, Cardozo Law School.


The paper exposes and analyzes a perhaps sometimes overlooked cost of the current workings of U.S. tort law: its potential adverse effect on innovation. Academic discussions of innovation are typically confined to the domains of patent and trade secret law. But tort liability for negligence, defective products, and medical malpractice is determined in part by reference to custom (industry standards, reasonable prudent manufacturer, state of the art, etc.). The article explores the courts’ reliance on custom and conventional technologies as the benchmark of liability, and whether this chills innovation and distorts its path. Specifically, the recourse to custom may tax innovators and subsidizes replicators of conventional technologies.

The authors explore the causes and consequences of this phenomenon and propose two possible ways to modify tort law in order to make it possibly more welcoming to innovation. Specifically, policymakers can accomplish this result, argues the paper, either by eliminating courts’ reliance on custom in making liability determinations or by instructing courts to give innovations whose safety was verified by independent industry experts the same deference they give custom.  An interesting read.