The Patent Office, which processes over half-a-million patent applications a year, routinely faces budgetary shortfalls, high patent examiner turnover, and a crushing backlog of patent applications. Given this challenging environment, it is not surprising that the patent examination process generates some degree of error, including errors that culminate in the issuance of a significant number of invalid patents. Given that invalid patents impose substantial harms on society, the question is what should we do about them?

At first glance, the solution seems straightforward: the Patent Office needs to do more to ensure it awards patents only to those inventions that deserve them. A seemingly promising start is to give patent examiners more time to evaluate applications. On average, a U.S. patent examiner spends only nineteen hours reviewing an application, including reading the application, searching for prior art, comparing the prior art with the application, writing a rejection, responding to the patent applicant’s arguments, and often conducting an interview with the applicant’s attorney. If examiners are not given enough time to evaluate applications, they may not be able to reject applications by identifying and articulating justifications with appropriate underlying legal validity. Offering validation for these concerns, our prior empirical work tested the extent to which patent examiner time allocations are causing examiners to grant invalid patents and found that examiners were indeed allowing patents of dubious quality because they are not given sufficient time.

Even in the face of this compelling evidence, however, it is not immediately clear that the solution to the patent quality crisis is to give patent examiners more time. While increasing examiner time allocations will decrease the number of invalid patents issued by the Patent Office, it is possible that the Patent Office is, as Mark Lemley famously wrote, “rationally ignorant.” That is, it may be rational for the Patent Office not to screen patent applications too rigorously because there is another institutional player that could weed out bad patents: the courts. More specifically, Lemley argued that because so few patents are litigated or licensed, it is better to rely upon litigation to make detailed validity determinations in those rare instances rather than increasing the resources to the Patent Office to provide more thorough review of all patent applications. Lemley supports his thesis with a cost-benefit analysis wherein he concludes that the costs associated with doubling the Patent Office’s hours to review patent applications outweighs the benefits gained by the resulting decrease in the number of invalid patents the Patent Office would issue. Although some of the numbers in his analysis reflect hard data, the dearth of empirical evidence available to the time forced him to make several critical assumptions, including assuming (rather than estimating) how many fewer patents the Patent Office would issue if examiner time allocations were doubled.