Haug Family Innovation Lecture Series: Irrational Ignorance at the Patent Office
Presented by Barnes & ThornburgThere is widespread belief that the Patent Office issues too many bad patents that impose significant harms on society. At first glance, the solution to the patent quality crisis seems straightforward: give patent examiners more time to review applications so they grant patents only to those inventions that deserve them. Yet the answer to the harms of invalid patents may not be that easy. It is possible that the Patent Office is, as Mark Lemley famously wrote, “rationally ignorant.” Because so few patents are economically significant, perhaps it makes sense to rely upon litigation to make detailed validity determinations in those rare cases rather than increase the expenses associated with conducting a more thorough review of all patent applications. This Article conducts a cost-benefit analysis, employing new and rich sources of data along with sophisticated empirical techniques to form novel, empirically driven estimates of the relationships that Lemley was forced, given the dearth of empirical evidence at his time, to assume in his own analysis. Armed with these new estimates, this Article demonstrates that the savings in future litigation and prosecution expenses associated with giving examiners additional time per application more than outweigh the costs of increasing examiner time allocations. Thus, we conclude the opposite of Lemley: society would be better off investing more resources in the Agency to improve patent quality than relying upon ex-post litigation to weed out invalid patents. Given its current level of resources, the Patent Office is not being “rationally ignorant” but, instead, irrationally ignorant.
