"troll" Check? a Proposal for Administrative Review of Patent Litigation

Lauren H. Cohen (Harvard Business School)
John M. Golden (University of Texas School of Law)
Umit Gurun (University of Texas at Dallas School of Management)
Scott Duke Kominers (Harvard Society of Fellows)

Abstract: The patent system is commonly justified on grounds of promoting social 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.

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