Rethinking Patent Quality: New Insights Challenge Old Assumptions

11 / 10 / 2024

A recent report from the Sunwater Institute has challenged long-held beliefs about patent quality in the United States. Contrary to popular opinion, the U.S. Patent and Trademark Office (USPTO) is not overwhelmed with "bad patents." In fact, only 7% of U.S. patent claims are erroneously granted, one of the lowest rates among major patent offices worldwide.

The report reveals a surprising finding: the USPTO is more likely to erroneously reject or abandon valid patent claims than to grant invalid ones. Approximately 18% of abandoned U.S. patent claims are actually valid under patentability criteria. This discrepancy is even more pronounced in tech-heavy fields like computer networks and communications.

These findings challenge the narrative that poor-quality patents are burdening the U.S. economy. Instead, they suggest that innovation may be stifled by the rejection of valid inventions. The economic impact of these «Type 2» errors – wrongly rejected patents – is harder to quantify but potentially more damaging than the costs of erroneously granted patents.

The report also debunks the notion that patent invalidation rates reliably indicate patent quality. Patents challenged in inter partes review (IPR) proceedings are not representative of all U.S. patents, and these challenges disproportionately target small entities.

Regarding patent policy implications, the report calls for a more balanced approach that considers both improper grants and improper rejections. It urges policymakers to recognize the trade-off between these errors and strive for a balance that fosters innovation.

The quest for patent quality is not just about weeding out bad patents – it’s about nurturing good ones. This report demonstrates that half of the equation may have been overlooked. It suggests that a broader perspective is needed to ensure the patent system is as innovative as the inventions it aims to protect.

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