Stuart Graham and Dietmar Harhoff have produced a piece of work that is going to cause a great deal of controversy in the United States. Their paper – Separating Patent Wheat from Chaff: Would the U.S. Benefit from Adopting a Patent Post-Grant Review? – goes right to the heart of one of the most controversial aspects of the proposed US patent reform legislation currently before Congress. Although post-grant opposition ahs found many supporters, among which is the current administration, there are many who reject it out of hand. Well, the latter are not going to like the conclusions Graham and Harhoff come to. This is from the abstract:
This paper assesses the impact in the US of adopting a patent post-grant review procedure (opposition). By employing novel methods for matching US patents to their non-US counterparts, we find that the opposition rate is about three times higher among the European Patent Office (EPO) equivalents of a sample of US litigated patents as against control-group (unlitigated) patents. Contingent upon reaching final judgment in EPO opposition, about 70 percent of these equivalent patents are either completely revoked or narrowed. Using these findings to inform a series of welfare estimates, we calculate a range of net social benefits that would accrue to the US from adopting a patent post-grant review. We discover that large social benefits would result primarily from the elimination of unwarranted market power, and less so from litigation cost savings per se. Our results provide evidence that the US could benefit substantially from adopting an administrative patent post-grant review, provided the mechanism is not too costly.