Screening for Patent Quality: Examination, Fees and the Courts

To study how governments can improve the quality of patent screening, we develop an integrative framework incorporating four main policy instruments: patent office examination, preand post-grant fees, and challenges in the courts. We show that examination and pregrant fees are complementary, and that pre-grant fees screen more effectively than post-grant fees. Simulations of the model, calibrated on U.S. patent and litigation data, indicate that patenting is socially excessive and the patent office does not effectively weed out low-quality applications. We quantify the welfare effects of counterfactual policy reforms and show how theydepend on the quality of the courts. JEL Classification: D82, K41, L24, O31, O34, O38