Prevalence of Weak Patents in the United States and its Consequence for Invention

Abstract

Enhancing patent quality is a continuing agenda in the patent policy domain for the concern that a patent with questionable validity (i.e., weak patents) distorts incentives for innovation. This study examines whether issuing a weak patent discourages the patent owner’s subsequent inventions and patent maintenance for the uncertainty in the validity of the patent claims. To this end, we propose a method of identifying weak patents. Our method reveals that about 13% of US patents filed from 2001 to 2010 are weak patents. Our multivariate regression analysis finds evidence showing that patent owners develop more subsequent inventions for a weak patent than they do for a non- weak patent. Additional analysis on the patent renewal finds that a weak patent is more or evenly likely to be maintained than a non-weak patent is. These findings indicate that the current patent system lacks the capability of eliminating weak patents ex-post. The concept of patent portfolio and the exclusionary nature of patents explain these findings. Implications for patent policymakers and firms are discussed.