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Report

Decreasing the patent office’s incentives to grant invalid patents

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Problem

There is general agreement that the U.S. Patent and Trademark Office issues too many invalid patents—those patents issued on an existing technology or on an obvious technological advancement—that are unnecessarily reducing consumer welfare, stunting productive research, and discouraging innovation. However, there has until recently been little to no compelling empirical evidence that any particular feature of the patent application system causes the Patent Office to allow the granting of invalid patents, making it difficult to fully reform the patent system.

Proposal

Frakes and Wasserman build upon new empirical evidence to propose three changes to the patent system that would reduce the issuance of invalid patents: (1) restructuring the Patent Office’s fee schedule to minimize the risk that fee collections will be insufficient to cover its operational costs, while also diminishing its financial incentive to grant patents when collections are insufficient; (2) limiting the number of repeat applications that applicants can file for the same invention; and (3) increasing the time examiners spend reviewing patent applications.

Abstract

There is general agreement that the U.S. Patent and Trademark Office is issuing too many invalid patents that are unnecessarily reducing consumer welfare, stunting productive research, and discouraging innovation. In this paper, Frakes and Wasserman build upon new empirical evidence to propose three changes to the patent system that would reduce the issuance of invalid patents: (1) restructuring the Patent Office’s fee schedule to minimize the risk that fee collections will be insufficient to cover its operational costs, while also diminishing its financial incentive to grant patents when collections are insufficient; (2) limiting the number of repeat applications that applicants can file for the same invention; and (3) increasing the time examiners spend reviewing patent applications.

Authors

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