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Why weak patents? Rational ignorance or pro-"customer" Tilt?

  • Lei, Zhen
  • Wright, Brian D.

The issuance of weak patents is widely viewed as a fundamental problem in the current US patent system. Reasons that have been offered for the granting of weak patents by the US Patent and Trademark Office (USPTO) include examiners’ “rational ignorance” of the patentability of applications and pro-“customer” rules and institutions that create incentives for examiners to grant patents of dubious validity to their “customers”- applicants. In this paper, we study whether US examiners’ behavior in prior art search betrays their assessment of applications’ patentability. For a sample of US patents for which applications were also filed at the European Patent Office (EPO), we construct a measure of the fraction of prior art that is missed by US examiners. We find that this measure significantly explains the probability of receiving a patent at the EPO. The results are robust to different empirical specifications. US examiners’ prior art searches indicate that they are, on average, not “rationally ignorant”. On the contrary, they identify and dedicate more search effort to those applications that seem more problematic, because they bear the burden of proof of non-patentability. Our study offers empirical evidence that a systematic problem of weak patents likely exists, and suggests that the problem may be more strongly attributable to the pro-applicant rules and policies than to examiners’ ignorance. The current prevalence of weak patents does not appear to be caused at the margin by lack of resources at the USPTO.

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File URL: http://purl.umn.edu/49279
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Paper provided by Agricultural and Applied Economics Association in its series 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin with number 49279.

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Date of creation: 2009
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Handle: RePEc:ags:aaea09:49279
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  1. Joseph Farrell & Carl Shapiro, 2008. "How Strong Are Weak Patents?," American Economic Review, American Economic Association, vol. 98(4), pages 1347-69, September.
  2. Stuart J. H. Graham & Bronwyn H. Hall & Dietmar Harhoff & David C. Mowery, 2002. "Post-Issue Patent "Quality Control": A Comparative Study of US Patent Re-examinations and European Patent Oppositions," NBER Working Papers 8807, National Bureau of Economic Research, Inc.
  3. Lanjouw, Jean Olson, 1998. "Patent Protection in the Shadow of Infringement: Simulation Estimations of Patent Value," Review of Economic Studies, Wiley Blackwell, vol. 65(4), pages 671-710, October.
  4. Hall, Bronwyn H & Jaffe, Adam B & Trajtenberg, Manuel, 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," CEPR Discussion Papers 3094, C.E.P.R. Discussion Papers.
  5. Graham, Stuart J.H. & Harhoff, Dietmar, 2006. "Can Post-Grant Reviews Improve Patent System Design? A Twin Study of US and European Patents," CEPR Discussion Papers 5680, C.E.P.R. Discussion Papers.
  6. Sakakibara, Mariko & Branstetter, Lee, 2001. "Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 77-100, Spring.
  7. Harhoff, Dietmar & Reitzig, Markus, 2002. "Determinants of Opposition Against EPO Patent Grants - The Case of Biotechnology and Pharmaceuticals," CEPR Discussion Papers 3645, C.E.P.R. Discussion Papers.
  8. Lanjouw, Jean O & Pakes, Ariel & Putnam, Jonathan, 1998. "How to Count Patents and Value Intellectual Property: The Uses of Patent Renewal and Application Data," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 405-32, December.
  9. Harhoff, Dietmar & Scherer, Frederic M. & Vopel, Katrin, 2003. "Citations, family size, opposition and the value of patent rights," Research Policy, Elsevier, vol. 32(8), pages 1343-1363, September.
  10. Jay Pil Choi, 2005. "Live and Let Live: A Tale of Weak Patents," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 724-733, 04/05.
  11. Lemley, Mark A. & Shapiro, Carl, 2004. "Probabilistic Patents," Competition Policy Center, Working Paper Series qt9xf1488p, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
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