Incentives to Challenge and Defend Patents: Why Litigation Won't Reliably Fix Patent Office Errors and Why Administrative Patent Review Might Help

Abstract

Given the limits on Patent Office scrutiny of patent applications, one might hope that ex post litigation can fix at least the important errors. Unfortunately, the often grossly skewed incentives to challenge and to defend issued patents make this view too optimistic. Since litigation cannot fix all errors, we urge better USPTO funding and higher standards of initial review, better incentives (not limited to formal duties) for applicants to find and disclose prior art information, and the creation of a cheap and workable administrative post-issue review. We explain why existing administrative reviews are not a workable system, and recommend some features that a new system should have.

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