Coase-Sandor Working Paper Series in Law and Economics

Publication Date

2011

Publication Title

Law & Economics Working Papers

Abstract

This Article analyzes patent mistakes—that is, mistakes made by the patent system when it decides whether a particular invention has met the patentability requirements. These mistakes are inevitable. Given resource constraints, some might even be desirable. This Article evaluates the relative costs of patent mistakes, so that we can make better ones. Three characteristics drive the costs of mistakes: their type (false positive or false negative), timing (early or late), and doctrinal basis (utility, novelty, nonobviousness, and so on). These characteristics make some mistakes more troubling than others. Consider, for example, the disclosure rules, which require that a patent reveal technical information about the invention. An early false positive on the disclosure rules occurs when the patent system wrongly grants a patent that does not adequately describe the invention. This kind of mistake forces the public to waste resources duplicating the inventor's achievement. By the time of a late false positive, however, that wasteful duplication has already occurred. If we want to avoid the costs of false positives on disclosure, we will have to do so early. The Article analyzes the trade-offs involved in making mistakes of different types, at different times, and on different doctrinal bases. The conclusions here have important implications for persistent issues in patent law, including how closely courts should scrutinize the validity of issued patents and how the PTO should allocate scarce enforcement resources.

Number

570

Included in

Law Commons

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