Certain patent offices offer the possibility for third parties to oppose

Certain patent offices offer the possibility for

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Certain patent offices offer the possibility for third parties to oppose granted patents that they deem invalid. As opposing a patent is a costly move, it can be inferred that only patents with some damaging effects on competition, and thus some economic value, will be opposed. Hence the fact that a patent is opposed can be interpreted as a signal of value. Further, patents that survive such opposition are proven to be strong patents that offer their holders the prospect of high profitability. Few patents are opposed. In 2006, the opposition rate at the EPO was around 5.4% (oppositions were filed against 2 990 patents). Of the patents opposed at the EPO, roughly one-third are revoked, one-third are maintained unchanged, and one-third are maintained amended. At the USPTO, interested parties wishing to challenge a US patent after it has been issued have two options: i) challenge the patent in federal court; or ii) request a “re-examination” of the patent by the USPTO. The opposition rate at the EPO is much higher than the re-examination rate at the USPTO for all technology classes (Merges, 1999; Graham et al ., 2002). The rate of re-examination at the USPTO between 1981 and 1998 was 0.3% (of grants), whereas at the EPO, the average opposition rate for the same period was 8.6% of grants. However, in absolute terms, patent litigation grew significantly in the United States from 1985 to 2000, although the rate of litigation relative to the number of issued patents has remained constant (Graham et al ., 2002). Some authors have found that opposed and litigated patents are of higher than average value. Harhoff et al. (2002) find that successful defence against opposition (in the German patent system) is a particularly strong predictor of patent value. 14 They explain that stronger patent rights survive what amounts to a two-tier selection process (grant and survival of opposition), which provides a highly reliable indicator of their quality. According to Lanjouw and Schankerman (1998), patents that are litigated have particular characteristics. Compared to a random sample of US patents from the same cohorts and technology areas, the authors find that more valuable patents and those with domestic owners are considerably more likely to be involved in litigation. Patents owned by individuals are at least as likely to be the subject of a case as corporate patents and litigation is particularly frequent in new technology areas. Notes 1. Inventions with high technical value might be widely appropriable ( e.g. because a patent is easy to circumvent in the invention’s particular field of technology). Inventions with small technical value may generate high economic value, e.g. if the inventor, for various reasons, already has a monopoly position on the market.
8. INDICATORS OF PATENT VALUE OECD PATENT STATISTICS MANUAL – ISBN 978-92-64-05412-7 – © OECD 2009 147 2. The merit of this approach is to gather information directly from the source.

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