Patent Quality Myth
Last Updated on Tuesday, 18 August 2009 02:20
Written by dbhalling
Tuesday, 18 August 2009 02:20
A number of papers have suggested that the United States Patent and Trademark Office’s (USPTO) quality in issuing patents is substandard. These papers suggest that the USPTO’s allowance rate is significantly higher than the allowance rate in Europe and Japan. From this they infer that the quality of patent examination, in the U.S. are not as thorough as those in Europe and Japan.
In the case of Jensen et at, Disharmony in International Patent Office Decisions, the population of patents studied were patents that issued in the U.S. and were filed in the EPO (European Patent Office) or the JPO (Japan Patent Office). Jensen et al found that in this population only 37.7% of this population of patents were also allowed in the EPO or JPO. Note that based on the population selected by Jensen et al. they could never find that the grant rate was higher for EPO or JPO than in the USPTO (United States Patent and Trademark Office), since the selected population included a 100% grant rate for the U.S. Of course, the U.S. has never had a 100% grant rate. The chart below shows the grant rate was never greater than 72% in the U.S. in the last 40 years.
Jensen et al. by their methodology biased the outcome so that the USPTO’s grant rate had to be higher than the EPO or JPO.
Ron D. Katznelson’s paper Bad Science in Search of “Bad” Patents explains this error and other errors in Jensen et al.’s methodology. Comparing grant rates between countries is extremely difficult. A major reason that patent applications are not allowed is that the inventor or their employer decides that the cost of obtaining a patent is no longer worth the cost. The longer the time between the filing of a patent application and its examination, the higher the likelihood that the applicant will abandon the case. Both the EPO and JPO have significantly longer waits for examination than the U.S. The extended delays for examination in Europe and Japan are not features that we want to imitate.
Another paper that purported to show higher allowance rates in the USPTO than other countries was Continuing Patent Applications and Performance at the U.S. Patent and Trademark Office-Extended, by Quillen and Webster. Quillen and Webster assume that continuations, divisionals, and continuations-in-part are all attempts to claim the same invention. This is clearly mistaken in the case of divisionals and continuations-in-part. As pointed out by Lawrence B. Ebert in Patent Grant Rates at the United States Patent and Trademark Office “The use of such an approach, as applied to patent families in which more than one continuing application issues as a patent, allows a grant rate in excess of 100%, — a nonsensical result.” Quillen and Webster attempted to fix this error in a subsequent paper, but as Ebert points out they were not successful. Ebert concludes “The patent grant rate studies of Quillen and Webster are flawed and the published grant rate number should not be relied upon in making arguments about patent reform.”
Economist Pat Choate has reviewed the question of numerous junk patents being issued by the USPTO from another point of view. He reviewed the number of USPTO patents that were held invalid in litigation or in reexamination proceedings. He compares this against the total population of patents issued in the same period. He states:
As to the massive numbers of “unworthy patents” argument, the real-world test is how many patents are challenged and the outcome of those challenges. Between 1981 and 2006 the USPTO issued more than 3.1 million patents. In that period, 8,600 were challenged at the Patent Office through inter partes and ex parte reexaminations. The number challenged amounts to less than three-tenths of one percent. Of those challenged, about 74 percent resulted in claims narrowed or cancelled. In addition, almost 60 percent of the relatively few patents challenged in a court trial are sustained.
My point is that the USPTO’s work is certainly not perfect, but the Patent Office is also not pouring out a stream of bad patents.
Since there are around 700 patent lawsuits per year with substantive adjutication, a high end calculation of the number of patents held invalid between 1981 and 2006 would be no more than 1,000 patents and of the 8,600 patents through reexamination cases no more than 6,784 patents were narrowed or held invalid. This means that out of 3.1 million patents 7,450 patents were actually held invalid or had their claims narrowed. This means that less than 0.25% of all the patents issued during this time-period were actually found to have problems.
There has been a concerted effort to suggest that there are numerous “bad” patents issued by the USPTO. This campaign is based on disinformation and has no factual support. Patents are the most expensive and time consuming process for obtaining title to property in the U.S. Even large corporations cannot afford to file patents, at a cost of $10k to $20K per patent per country, willy nilly. It is common for a patent to take three or more years to issue. Only inventors who are serious are going to file a patent application under these circumstances. When they consider whether to file a patent application they are likely to err on the side of not filing a patent if it looks questionable whether their invention will obtain a patent.
If it took this amount of time and money to obtaining title to real property, we would assume we were talking about some despotic third world country. Copyrights are not examined, are inexpensive to file and assumed to be valid. There is no justification for the U.S.’s poor treatment of inventors compared to authors.
The “bad patents” myth has no basis in fact, denies inventors’ title to their inventions, and hurts U.S. innovation and our economy.
 Cecil D. Quillen and Agden D. Webster, Continuing Patent Applications and Performance of the U.S. Patent and Trademark Office, 11 Fed. Cir. B.J. 1 (2001-2002); Paul H. Jensen et al., Disharmony in International Patent Office Decisions, 15 Fed. Cir. B.J.679, 698 (2006).
 Katznelson, Ron D., Bad Science in Search of “Bad” Patents, Federal Circuit Bar Journal, Vol. 17, No. 1, pp. 1-30, August 2007.
 Cecil D. Quillen and Agden D. Webster, Continuing Patent Applications and Performance of the U.S. Patent and Trademark Office, 11 Fed. Cir. B.J. 1 (2001-2002)
 Ebert, Lawrence B., Patent Grant Rates at the United States Patent and Trademark Office, Chicago-Kent Journal of Intellectual Property, 2008, pp. 108-116.
 Choate, Pat, Patent ‘Reform’ is Anything But, Manufacturing & Technology News, Vol. 14, No. 12, June 29, 2007. http://www.manufacturingnews.com/news/07/0629/art2.html
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