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What can patent litigation tell us
about patent examination?
Alan Marco and Richard Miller
September 2016
OFFICE OF CHIEF ECONOMIST
www.uspto.gov/economics
Patent litigation conditions
1. Valuable enough to make litigation profitable
2. 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
2
Strategy
1. Match litigated patents to “similar” non-litigated
patents
2. Estimate how examination characteristics impact the
probability of litigation
Sample:
• Patents granted 2005-2011
• Patent litigation filings in federal district court, 2005-
2015 (source: RPX). Examine first filing only.
3
Litigated Patents by Year of Issue and
Technology Area
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0
500
1000
1500
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2005 2006 2007 2008 2009 2010 2011
Nu
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Year of patent issue
CHEM
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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?
5
Variables included in the analyses
Application characteristics
• small entity status
• foreign priority & PCT
• number of US parent applications
• family pendency
Claims characteristics
• independent claim count
• independent claim length (shortest)
Examination characteristics
• examiner seniority
• examination pendency
• continuances (RCEs)
• interviews
• appealed?
• first-action allowance?
• applicant disclosures (IDS)
• backward citations
6
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
7
Conditional Logit Results
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Odds Ratio Coefficient
Point Estimate 95% CI Point Estimate 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 1.052 1.083 0.065 0.007
Length of Shortest Independent Claim** 0.999 0.998 0.999 -0.001 0.000
Backward Citations
To US Patents and Applications** 1.001 1.000 1.002 0.001 0.000
To Foreign Patents or Applications* 1.004 1.001 1.007 0.004 0.002
To Non-Patent Literature** 1.002 1.001 1.003 0.002 0.001
** Coefficient is statistically significant at the 1-percent level.
* Coefficient is statistically significant at the 5-percent level.
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0.5
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1.5
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Od
ds
Rati
oApplication characteristics
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Note: effects calculated for a change
from the 25th percentile to the 75th
percentile for continuous variables
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Examination characteristics
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0
0.5
1
1.5
2
2.5
3
Od
ds
Rati
o
Note: effects calculated for a change
from the 25th percentile to the 75th
percentile for continuous variables
111111
Claim characteristics
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0
0.5
1
1.5
2
2.5
3
Od
ds
Rati
o
Note: effects calculated for a change
from the 25th percentile to the 75th
percentile for continuous variables
12
Goodness of fit (ROC Curve):
Application characteristics drive the model
12