Scaling the Patent System

Not all industries face high patent discovery costs. Chemical patents are "indexable," meaning that relevant patents can be efficiently retrieved by chemical formula. As a result, discovery costs in the chemical and pharmaceutical industries are low, and inadvertent infringement by firms in these industries is rare. But many other patent categories are not indexable, and in some cases that makes avoiding infringement practically impossible. In software, for example, patent clearance by all firms would require many times more hours of legal research than all patent lawyers in the United States can bill in a year. The result has been an explosion of patent litigation.