1. What can patent litigation tell us about patent examination?
Alan Marco and Richard Miller September 2016
OFFICE OF CHIEF ECONOMIST

2. Patent litigation conditions
Valuable enough to make litigation profitable
Some degree of uncertainty so that there is a dispute
Patent value is a function of validity, scope, and the underlying technology
Patent examination affects scope and uncertainty, but not the underlying technology
Caution: litigated patents are highly selected, so one must be careful generalizing the results

3. Strategy Match litigated patents to “similar” non-litigated patents
Estimate how examination characteristics impact the probability of litigation
Sample:
Patents granted
Patent litigation filings in federal district court, (source: RPX). Examine first filing only.

4. Litigated Patents by Year of Issue and Technology Area

5. Methods
Control group of non-litigated patents that match the litigated patents on several characteristics
Exact match on examination art unit & year of issue
Exact match on maintenance history
Nearest neighbor match on 3-year forward citations
Random sample within that group
Final sample is a 1-to-1 matched sample (>10,000 litigated patents)
Conditional logit: Is the incidence of litigation correlated with the examination characteristics?

6. Variables included in the analyses
Application characteristics
Examination characteristics
small entity status
examiner seniority
foreign priority & PCT
examination pendency
number of US parent applications
continuances (RCEs)
family pendency
interviews
appealed?
Claims characteristics
first-action allowance?
independent claim count
applicant disclosures (IDS)
independent claim length (shortest)
backward citations

7. Main Results
Largest impact on litigation is from application characteristics
Incidence of litigation is impacted by characteristics of examination to a much lesser extent
Characteristics of the independent claims are important

8. Conditional Logit Results
Odds Ratio
Coefficient
Point Estimate
95% CI
Standard Error
Examiner Signatory Authority
None**
0.821
0.763
0.884
-0.197
0.038
Partial*
0.843
0.722
0.984
-0.171
0.079
Missing
1.176
0.948
1.459
0.162
0.110
Small Entity**
2.474
2.312
2.648
0.906
0.035
Continuation History
Number of Domestic Parents**
1.238
1.210
1.266
0.213
0.012
Pendency from Earliest Parent to Docketing
1.000
0.998
1.001
0.000
0.001
Foreign Applications
Foreign Priority Claim**
0.414
0.378
0.452
-0.883
0.046
National Stage Entry**
0.779
0.662
0.917
-0.249
0.083
Examination Variables
Number of IDS Filings**
1.043
1.034
1.052
0.042
0.004
Number of Recorded Interviews**
1.215
1.162
1.270
0.195
0.023
Pendency Before Examiner**
0.898
0.874
0.924
-0.107
0.014
Number of RCEs**
1.130
1.075
1.187
0.122
0.025
At Least One Appeal**
1.973
1.515
2.570
0.680
0.135
First-Action Allowance**
0.853
0.774
0.939
-0.159
0.049
Patent Claims Variables
Number of Independent Claims**
1.068
1.083
0.065
0.007
Length of Shortest Independent Claim**
0.999
-0.001
Backward Citations
To US Patents and Applications**
1.002
To Foreign Patents or Applications*
1.004
1.007
0.002
To Non-Patent Literature**
1.003
** Coefficient is statistically significant at the 1-percent level.
* Coefficient is statistically significant at the 5-percent level.

9. Application characteristics
Note: effects calculated for a change from the 25th percentile to the 75th percentile for continuous variables

10. Examination characteristics
Note: effects calculated for a change from the 25th percentile to the 75th percentile for continuous variables 10

11. Claim characteristics
Note: effects calculated for a change from the 25th percentile to the 75th percentile for continuous variables 11 11 11

12. Goodness of fit (ROC Curve):
Application characteristics drive the model 12