Getting patents is becoming increasingly important to business in the United States — and filing rates are soaring. But is the increase in patenting activity creating its own problems? Faced with a backlog of more than a million applications, the U.S. Patent and Trademark Office has precious little time to adequately research whether an invention meets the standards required by the Patent Law.
Some critics of the system are calling for greater administrative scrutiny of patent applications to avoid the approval of patents that don’t meet basic standards. But F. Scott Kieff, L’94, has a counterintuitive solution: litigation. The cost of thoroughly examining each application is greater than litigating because most patents do not matter to deals or disputes. However, Kieff, a professor at Washington University School of Law and senior fellow at Stanford University’s Hoover Institution, said that even for those patents that do matter the benefits or more administrative process are very small while the likely costs of an administrative approach over litigation are very large.
Kieff was speaking at a symposium in January co-sponsored by the University of Pennsylvania Law Review and the Penn Center for Techonology, Innovation, and Competition. The title was “Foundations of Intellectual Property Reform.” Panelists explored intellectual property reform in the context of administrative law, patent quality, new institutional economics, monopolies and social norms.
Relying more on litigation helps the patent system distinguish between patents that matter and those that don’t and lightens the workload for patent examiners by compelling the patent holder and the alleged infringer to prove that the patent is valid and being infringed, said Kieff. A key benefit of litigation is that it favors facts over politics because cases are won on the merits of evidence and research.
Penn Law Professor R. Polk Wagner agreed with Kieff that making the examination process more rigorous wouldn’t improve patent quality. He offered a different solution: changing incentives for inventors. In this scheme, the law would create incentives for private parties to provide more and better information during the review process, which would help the Patent Office and the public make better decisions.
On a panel about new institutional economics, Penn Law Professor Gideon Parchomovsky discussed how laws rather than economic principles prevent innovators in the technology sector from buying or selling researchrelated information on the market before it is patented.
Although they might stand to financially benefit from selling their research, they don’t do so because of the laws that are in place. Their work consequently stays within the firm sponsoring the research, until it is patented. Parchomovsky co-authored the paper with Oren Bar-Gill of New York University Law School.