The Patent Quality Control Process: Can We Afford An (Rationally) Ignorant Patent Office?
This paper considers patent granting as a two-tiered process, which consists of patent office examination (public enforcement) and court challenges (private enforcement). It argues that, when the patent-holder has private information about the patent validity, (i) a weak patent is more likely to be settled and thus escape court challenges than a strong patent; and (ii) when the economy is suffered from low patent quality problem, a tighter examination by the patent office may strengthen private scrutiny over a weak patent. Both work against Lemley (2001)'s hypothesis of a "rationally ignorant'' patent office. The paper then introduces other policy instruments. It shows that (i) application fees, used as a tool to deter opportunistic patenting, may crowd out private enforcement but cannot replace public enforcement; and (ii) the usefulness of a pre-grant challenge procedure is subject to several restrictions, including the private challenger's timing choice.