The United States patent system has become sand rather than lubricant in the wheels of American progress. Such is the premise behind this provocative and timely book by two of the nation's leading experts on patents and economic innovation.

"Innovation and Its Discontents" tells the story of how recent changes in patenting--an institutional process that was created to nurture innovation--have wreaked havoc on innovators, businesses, and economic productivity. Jaffe and Lerner, who have spent the past two decades studying the patent system, show how legal changes initiated in the 1980s converted the system from a stimulator of innovation to a creator of litigation and uncertainty that threatens the innovation process itself.

In one telling vignette, Jaffe and Lerner cite a patent litigation campaign brought by a a semi-conductor chip designer that claims control of an entire category of computer memory chips. The firm's claims are based on a modest 15-year old invention, whose scope and influenced were broadened by secretly manipulating an industry-wide cooperative standard-setting body.

Such cases are largely the result of two changes in the patent climate, Jaffe and Lerner contend. First, new laws have made it easier for businesses and inventors to secure patents on products of all kinds, and second, the laws have tilted the table to favor patent holders, no matter how tenuous their claims.

After analyzing the economic incentives created by the current policies, Jaffe and Lerner suggest a three-pronged solution for restoring the patent system: create incentives to motivate parties who have information about the novelty of a patent; provide multiple levels of patent review; and replace juries with judges and special masters to preside over certain aspects of infringement cases.

Well-argued and engagingly written, "Innovation and Its Discontents" offers a fresh approach for enhancing both the nation's creativity and its economic growth.

The measurement of scientific, technological, and innovative activities (STI) in the economy is an increasing challenge faced by statistical agencies around the world. Measuring Science, Technology, and Innovation: A Review surveys the current state of the art including the concept of indicators, their quality and use, and a schematic model of the STI system that can identify gaps in the set of indicators commonly in use. The authors review the developments in STI measurement that have taken place in the rest of the world, particularly the widespread use of innovation surveys. The monograph concludes with a discussion of the measurement gaps and issues in the U.S., which we identify as innovation (especially in the service sector), non-R&D investment related to innovation, data timeliness, data linkages, measurement related to public policy goals, and the sources of capital for innovation. After an introduction, Section 2 summarizes the framework for analysis of the STI system that is most widely used by economists. Section 3 considers how the specific data currently collected by the U.S. government, and indicators constructed from those data, relate to the important concepts within the framework. Section 4 expands this discussion by reviewing data collected and indicators published by other countries and international organizations. Section 5 then turns to the issues of policy, and draws explicit connections between important policy questions and indicators, using the framework of Section 2. Section 6 builds on these discussions to highlight gaps and issues with the existing indicators, and Section 7 provides concluding comments.