Policy Implications of Weak Patent Rights

Intellectual Property and Patents

Article Snapshot

Author(s)

James Anton, Hillary Greene and Dennis A. Yao

Source

in Innovation Policy and the Economy, Vol. 6, Eds. A. Jaffe, J. Lerner, and S. Stern, Cambridge, Massachusetts: The MIT Press, 2006, pp. 1-26

Summary

This article analyzes the effect that weak patents have on policy, disclosure, competition, and property rights.

Policy Relevance

Patent policy is often made by considering the implications of granting strong patent protection. However, many patents lack the full force of patent rights and should be considered in creating future policy reform.

Main Points

  • Patents allow inventors to protect innovations by granting exclusive rights over the use of their innovation for a fixed period of time.  However, after a patent is granted, it can be contested in court, where the patent may be found invalid.
     
  • Strong patents are those where the inventor enjoys the full protection of the law without much fear of the patent being invalidated by the court.  Weak patents are those where there is a substantial possibility of invalidity.
     
  • Studies have shown that the percentage of weak patents may be as high as 65 percent, constituting the majority of patents issued.  As such, these weak patents should be considered in designing future patent reform.
     
  • Weak patents have a number of effects:

    • Weak patent rights provide less of an incentive for investment in innovation, because the resulting innovation is less valuable.
       
    • Weak patents act as an incentive for companies to keep their new innovations secret rather than to disclose them to the public.
       
    • Weak patent rights may also allow for anticompetitive settlements in patent litigation.
       
  • In order to combat these detrimental effects on patent policy, reform is necessary.  Changes in judicial determinations of damages in patent litigation cases could increase the incentive to innovate, and re-examination of patents suspected of anticompetitive behavior could prevent antitrust violations.
     
  • The analysis of weak patents as part of the larger patent structure is necessary in order to correctly implement patent reforms that will continue to incentivize innovation.

 

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