1. Law in the Global Marketplace: Intellectual Property and Related Issues Hosted by: Patent Office Invalidation Procedures: A Comparative Analysis

2. 2 Main Topics Compare examination, opposition, and litigation systems across major patent systems; “rational system design” Note “convergence”: all major systems now break down into these three primary stages in the life of a patent 2

3. The Theoretical Case FOR Oppositions Joseph Farrell and Robert Merges: Incentives to challenge and to defend patents: Why litigation won’t reliably fix patent office errors and why administrative patent review might help 19 Berkeley Technology Law Journal 943–970 (2004) 3

4. Why Oppositions are Valuable Lower cost mechanism to get more validity information into the patent system Less costly than litigation More effective than an examiner can be in initial examination: motivated, knowledgeable opposing party vs. examiner 4

5. Dietmar Harhoff, Max Planck Institute, Munich 5

6. Empirical Verification of the Value of Oppositions Stuart Graham and Dietmar Harhoff Separating patent wheat from chaff: Would the US benefit from adopting patent post-grant review? 43 Research Policy 1649 (2014) 6

7. Continuation: Of patents both (1) opposed in the EPO and (2) litigated in the US – The opposition outcome for these “dual challenged” patents in Europe was roughly the same as for all opposed EPO patents 1/3 revoked; 1/3 amended; 1/3 survived intact 7

8. Cheaper Procedure... Would have saved costs for these patents to be opposed (vs. litigated) BUT more importantly, many patents that were NOT litigated were invalidated in EPO oppositions Implying significant social welfare savings from weeding out more weak patents 8

9. Grounds The main reasons for revocation are lack of inventive step (43%), lack of novelty (22%) or added subject matter (11%). Aalt van de Kuilen, Successful European oppositions: Analysis for the patent information professional, 35 World Patent Information 126 (2013) 9

10. Paul H. Jensen, Alfons Palangkaraya and Elizabeth Webster, “Application pendency times and outcomes across four patent offices.” Intellectual Property Research Institute of Australia, University of Melbourne Working Paper No. 01/08 February 2008 10

11. 11 Jensen, Palangkaraya and Webster, 2008, p.10

12. Jensen et al For families of patents based on a common priority filing: EPO: Fairly close harmony between US and EPO – only 3.8% of applications granted in US were rejected in EPO BUT: longer EPO pendency may mean this understates ultimate US-EPO variation rate 12

13. Jensen et al., cont’d Serious differences between US/EPO and JPO –10% of patents granted by both US and EPO are rejected in JPO –24% of patents granted by both US and EPO were either abandoned (16%) or still pending (9%) 13

14. Title 14 Elizabeth Webster, Paul H. Jensen, and Alfons Palangkaraya, Patent examination outcomes and the national treatment principle, 45 RAND J. Econ. 449 (2014)

15. Key Finding Significant variation in outcomes across four national patent offices Focuses especially on JPO/EPO applications 15

16. What this is pointing toward... A rational system of Graduated Validity Screening Examination, Opposition, Litigation Also: more nuanced and detailed incentive analysis within each of the 3 stages 16

17. Rational Patent Office Procedures Decide on desired minimum average patent quality Design fee structure and maintenance fees rationally Keep tight controls on opposition costs 17

18. Dennis Crouch & Robert Merges, Operating Efficiently Post-Bilski by Ordering Patent Doctrine Decisionmaking, 25 Berkeley Tech. L.J. 1673 (2011) 18

19. Basic Idea Continue rational progression post-issuance Apply “lower cost” screens on validity (novelty, enablement, non-obviousness) BEFORE tackling the complex and controversial section 101 analysis 19