In an effort to balance static and dynamic efficiency in the production and use of knowledge, societies institute intellectual property policies. In the United States, the patent system is a well-established mechanism to provide inventors with time-limited protection of new technologies in exchange for disclosure of information about their inventions. Emerging biotechnology, specifically the filing of patents on gene sequences, raises serious questions about whether the patent system is appropriately weighing societal costs and benefits in its grants of intellectual property protection. Gene sequences represent a hybrid case between discrete inventions and more general pieces of information that are useful for many, potentially very different, purposes. This information content in genes makes it possible for a patent on a gene to cover a wide range of possible technological applications and, as a result, be of unknown breadth when issued. This analysis explores the potential effect of these characteristics on future innovation in biotechnology. © 2003 by the Association for Public Policy Analysis and Management.