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The recent surge in U.S. patenting and expansion of patentable subject matter has increased patent office backlogs and raised concerns that in some cases patents of insufficient quality or with inadequate search of prior art are being issued. At the same time patent litigation and its costs are rising. This paper explores the potential of a post-grant review process modeled on the European opposition system to improve patent quality, reveal overlooked prior art, and reduce subsequent litigation. We argue that the welfare gains to such a system may be substantial.

We report the results of the first comparative study of the determinants and effects of patent oppositions in Europe and of re-examinations on corresponding patents issued in the United States. The analysis is based on a dataset consisting of matched EPO and US patents. Our analysis focuses on two broad technology categories - biotechnology and pharmaceuticals, and semiconductors and computer software. Within these fields, we collect data on all EPO patents for which oppositions were filed at the EPO. We also construct a random sample of EPO patents with no opposition in these technologies. We match these EPO patents with the “equivalent” US patents covering the same invention in the United States. Using the matched sample of USPTO and EPO patents, we compare the determinants of opposition and of reexamination. Our results indicate that valuable patents are more likely to be challenged in both jurisdictions. But the rate of opposition at the EPO is more than thirty times higher than the rate of reexamination at the USPTO. Moreover, opposition leads to a revocation of the patent in about 41 percent of the cases, and to a restriction of the patent right in another 30 percent of the cases. Re-examination results in a cancellation of the patent right in only 12.2 percent of all cases. We also find that reexamination is frequently initiated by the patentholders themselves.

This ICC Special Issue commemorates the life and work of Professor Nathan Rosenberg. Nathan Rosenberg was one of the founders of the interdisciplinary field of study known as the "economics of innovation," and this Issue contains a series of papers by leading scholars in the field that address some of the key themes of Rosenberg's work, as well as a roundtable on the role, contributions, and intellectual legacy of Nate Rosenberg. [ABSTRACT FROM AUTHOR]