“Troll” Check? A Proposal for Administrative Review of Patent Litigation

John Golden (University of Texas), Lauren Cohen, Umit Gurun & Scott Kominers, ““Troll” Check?  A Proposal for Administrative Review of Patent Litigation”

The patent system is commonly justified on grounds of promotingsocial welfare and, more specifically, scientific and technological progress.  For years, however, there has been concern that patent litigation in the United States is undermining, rather than furthering, these goals.  The time, cost, and complexity of patent suits provide openings for opportunistic assertions of patent infringement that can generate outcomes, possibly through settlement, that represent more a distortion than a fulfillment of patents’ purpose.  Such opportunistic assertions can come from any form of patent holder but have been perceived as especially associated with patent-enforcement specialists commonly derided as “patent trolls.”   This article proposes a means to address the information problems that facilitate opportunistic assertion—namely, the institution of an automatic process of substantive but non-binding administrative review of new patent-infringement  lawsuits.    Whether  conducted  by  an  independent  Patent Litigation Review Board or a division of the U.S. Patent and Trademark Office, such review would (1) help discourage—or bring to an earlier and less costly end—relatively weak patent-infringement lawsuits; (2) strengthen the  hands  and  likely  fates  of  both  patentees  and  accused  infringers  with especially  robust  cases;  (3)  flag  weaknesses  in  litigation  positions  to  the benefit of both private parties and the courts; and (4) provide policymakers with more readily aggregated information that facilitates evaluation of the patent system’s performance.  Multiple economic models are used to indicate the likely benefits of such review.  Nonetheless, consistent with the notion that an intended benefit of such review is improved information that can shape future policy, the article proposes that the review process be adopted only on a pilot basis, with the review’s status and shape to be reevaluated before the approval of any mandate for its continuance.