If the PTO's examination and the trial processes were revamped as we suggest, then patent litigation would be the last resort when disputes over patent claims cannot be resolved. There would still be patent suits, of course, and they would still be expensive. And in areas where technology is changing rapidly and there are numerous competing and overlapping claims, there would still be considerable uncertainty about who has the rights to what technology.
But the revamping would reduce the pervasive and damaging fear that almost any product or process is always at risk of an infringement claim. When suits are filed based on patents of questionable validity, accused infringers would negotiate from a position where both parties could expect a reasonably competent determination as to novelty and nonobviousness. That fact alone would reduce the incentive for a defendant to pay royalties and settle rather than undertake a risky legal battle, no matter how questionable the validity of the patent at issue.
We need to make sure that before they can be used to restrict the commercial activities of competitors, patents have received the appropriate scrutiny to ensure their validity. Our reform provides this, because it allows informed parties to be involved before a patent is issued. At the same time, we need to accept that the PTO will still make mistakes, so our proposal creates a judicial system that deals with those mistakes in a balanced way.
About The Author
Adam B. Jaffe is the Fred C. Hecht Professor in Economics and Dean of Arts and Sciences at Brandeis University, in Waltham, Mass. Josh Lerner is the Jacob H. Schiff Professor of Investment Banking at Harvard Business School in Cambridge, Mass. They cowrote Innovation and Its Discontents: How Our Broken Patent System Is Endangering Innovation and Progress, and What to Do About It, which was published in November by Princeton University Press.
