Understanding Patent Quality Mechanisms

Abstract:     
The cry to 'improve patent quality' is heard anywhere patent lawyers gather and is a centerpiece of many of the political and academic establishments' major reform agendas. Indeed, although the modern patent system is entangled in policy disputes across a huge range of issues, the need to improve patent quality is essentially undisputed. What has largely been lost in this drumbeat for improved patent quality is that the modern patent system affirmatively encourages low patent quality - the incentives at work are such that we cannot reasonably expect anything other than very large numbers of low-quality patents. For this reason, virtually all of the proposed reforms directed to patent quality are doomed to fail; until we change the incentives (and change them quite significantly), the patent-quality problem will continue to grow. In this Article, I suggest that only by understanding the mechanisms of patent quality - the incentive structure that not only discourages 'good' patent behavior but also encourages 'bad' patent behavior - will we make any real progress in improving the situation. Low patent quality, I argue, is not simply the problem of the U.S. Patent and Trademark Office (USPTO) and its counterparts worldwide, and no patent office can 'fix' patent quality alone. Indeed, given the number of annual filings, it is hard to imagine any scenario in which enough resources could be directed toward this effort to have a meaningful impact. Instead, a serious effort to improve patent quality will need to address the reasons why patentees increasingly adopt a high-volume, low-quality patenting strategy, why litigation has become virtually the only reliable tool for determining a patent's scope and validity, and why memes such as 'patent trolls' and 'patent thickets' have become embedded in current legal-policy discourse. A patent system that yields high-quality patents is an attainable goal. But administrative reforms - although they might well help - will not alone get us there. Until patentees have strong, unequivocal incentives to seek patents that clearly meet the standards of patentability, that are explained in the context of the prior art, and that draw clear and unambiguous lines around their subject matter, we will not succeed. The tools are there -- we just need to understand which ones to use.

Keywords: patents, patent quality, patent law, USPTO

JEL Classifications: D6

Accepted Paper Series