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Study: Post-Grant Review Could Increase PTO Pendency by 25%

By Peter Zura

Professor Scott Shane of Case Western Reserve University, released analysis of the impact of proposed post-grant review and expanded inter partes reexamination of U.S. patents. According to Shane, the proposed changes will have the following likely effects:

• Increase the length of patent pendency. Under the proposed changes, the length of time between patent application and patent issuance would increase from 32 months to 40 months.
• Increase the costs of defending patent validity by an estimated $2.2 billion over the current cost of litigation.
• Reduce investment in R&D. Reducing the value of patents significantly reduces investment in R&D. The proposed changes would lead to an annual reduction of $4.4 billion in industrial R&D.
• Compromise certainty about patent validity. The new post-grant review and expanded inter partes reexamination processes would make uncertain the validity of approximately $1.4 billion to $1.7 billion of patents issued annually, totaling $8.1 billion to $10.3 billion of patents over the six years it takes to get an outcome of the average review case.
• Hinder efforts of U.S. universities to transfer their inventions to the private sector.
• Weakening patent protections through expanded administrative challenges would jeopardize over $1 billion annually due to a reduction in the amount of university technology that would be commercialized by industry.
• Increase strategic patenting behavior by large, established firms. Strategic efforts to hinder the performance of competitors by forcing them to defend their patents against multiple challenges, beginning with reexamination and review proceedings and ending with litigation, are a likely outcome of the proposed changes.

Moreover, the study concludes that the proposed legislation will (1) not improve patent quality,
(2) not reduce the cost of patent litigation, and (3) not speed the determination of patent validity.

The study is made available through the Manufacturing Alliance on Patent Policy, and may be accessed here (link)

Judiciary ranking member Jeff Sessions requested that Shane examine the issue earlier this month as staffers for Leahy and Sessions continue meeting with stakeholders about the topic.

See Tech Daily Dose: "Study: Patent Proposal Could Be Costly" (link)

Full post as published by Two-Seventy-One Patent Blog on July 21, 2009 (boomark / email).