Economics Commentary #1 Patent Lawyer Demand Rises Following U.S. Legislative Overhaul Bloomberg, Oct. 8, 2011

by wewts (student)

International Baccalaureate Economics

Yuliya Pakhilka

IB Economics

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IB Economics Commentary #1

“Patent Lawyer Demand Rises Following U.S. Legislative Overhaul” – Bloomberg, Oct. 8, 2011

Word Count: 601

Due: October 17, 2011

IB Syllabus Section II

Yuliya Pakhilka

The extract explains how the quantity demand for patent lawyers far surpasses the quantity supply of patent lawyers. Quantity demand is the want, ability, and willingness of consumers to purchase a good or service. Quantity supply is the amount of a good or service that a seller is willing to sell at a specific price. The service that the extract describes is that which is provided by a patent lawyer, preferably one with a degree in engineering or computer science as well as at least four years of experience in a strong law firm. Patent lawyers account for 15% of the job opportunities in law firms; however, the supply for such an attorney is low and makes up only 3% of U.S. lawyers. This has caused a shortage. Because of this shortage, the price that a patent attorney charges is much higher than that of an average lawyer, as is addressed in the extract. As price increases, the quantity demanded by consumers typically decreases; so in the case, innovation will only be discouraged due to the high price of a proper attorney. The high price and low quantity result in a very high equilibrium, or the optimum price and quantity of a good or service. The demand for a patent lawyer is directly proportional to the advancements of technology. To keep up with demand, more patent attorneys and patent agents are being hired; however, a law firm cannot just produce 100 new attorneys to keep up with client needs, making this a service with low supply elasticity. A low supply elasticity means that one will only see significant changes in supply during the long run, which is a period of time long enough for companies to enter or leave the market.

The increase in demand presents various results. To begin with, the supply for civil attorneys will decline because they are a substitute career path for patent attorneys. More people will want to become patent attorneys as opposed to civil attorneys because there is a greater job market. Colleges will begin to see an increase in the amount of applications to law schools and engineering programs to fulfill the demand. Although an eventual increase in the supply of

These new patents will lead to advancements in technology which cause increases in supply. Many of these advancements may also increase ...