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

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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.

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Litigated Patents by Year of Issue and

Technology Area

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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?

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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

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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

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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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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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Note: effects calculated for a change

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Claim characteristics

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Note: effects calculated for a change

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percentile for continuous variables

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Goodness of fit (ROC Curve):

Application characteristics drive the model

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