Patent Reform and Differential Impact

Abstract

This article presents a new method of analyzing patent reform proposals through the use of differential impact analysis. Congressional efforts to address the crisis of confidence in the U.S. patent system have failed up to the present day. If Congress is to have any hope of passing much needed legislative reform to the Patent Act, the supporters of patent reform will have to unite behind a streamlined set of proposals that directly address the most pressing and unambiguous defects of the current patent system. To that end, we have proposed applying a test of differential impact to enable Congress to prioritize those reforms which will discourage the acquisition and assertion of bad patents without unduly prejudicing the interests of the holders of good patents. The differential impact approach elucidated in this article has at least three distinct advantages over other efforts to rewrite the patent system from the ground up. First, the differential impact approach provides a mechanism by which to evaluate competing claims for legislative resources. Second, the differential impact approach is an appropriate response to the empirical uncertainty surrounding optimal patent scope. Third, differential impact is consistent with the need to take the legitimate expectations of current stakeholders into account.

Keywords: Patent, law and economics, bad patents, differential impact, uncertainty, information asymmetries, post-grant review