Sunday, December 05, 2004

Further criticism of Lemley's "rational ignorance" at the USPTO

Mark Lemley published a paper in the Northwestern University Law Review suggesting "rational ignorance" at the USPTO was acceptable and that litigation of bad patents was the proper way to deal with bad patents.

In a paper "Incentives to Challenge and Defend Patents: Why Litigation Won't Reliably Fix Patent Office Errors and Why Administrative Patent Review Might Help" [19 Berkeley Tech. L.J. 943 (2004)], Joseph Farrell and Robert P. Merges criticize Lemley's position.

The authors conclude:

--The economics of patents often create a grave imbalance of incentives between a patentee and a potential challenger to the patent. Incentives within litigation itself will be unbalanced, especially when a failed challenge will not penalize an infringer relative to no challenge at all. The fact that litigants in important cases typically choose to spend a lot of money implies that spending raises the probability of a favorable outcome. Hence, unbalanced incentives are apt to create biased outcomes. Meanwhile, incentives to challenge at all are unbalanced when a patentee is expected to severely punish an unsuccessful challenger. All this makes litigation an inadequate substitute for adequate patent examination at the USPTO.--

The authors also note

--If the patent litigation game encourages settlement in cases involving invalid patents - and we believe it is - then that game is costing society a great deal of money. --

This issue is more fully developed in an article by Joseph Scott Miller, 19 Berkeley Tech. L.J. 667 (2004).

None of the authors addresses the importance of having accurate patents in the patent database. Because about 95% of patents are not litigated, this is an important issue as to the overwhelming majority of issued patents.


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