Inefficient examination leads to invalid patents
Frakes, Associate professor of law, and Wasserman, Associate professor of law, ‘22
[Michael D., Melissa F., Published July 2020 Revised May 2022, National Bureau of Economic Research, “INVESTING IN EX ANTE REULATION: EVIDENCE FROM PHARMACEUTICAL PATENT EXAMINATION”, https://www.nber.org/system/files/working_papers/w27579/w27579.pdf, Accessed July 09 2024, AMH] Our results suggest that time constraints facing U.S. patent examiners may be presently leading to the issuance of invalid secondary pharmaceutical patents that delay generic entry. We acknowledge, however, that these results do not immediately support the merits of increasing time allocations at the Patent Office. After all, among other considerations, time allocations will naturally entail greater expenditures and the federal courts nonetheless provide a backstop that may catch and correct the harms stemming from invalidly issued drug patents. In Part IV of this paper, we set forth a structure by which one might evaluate the welfare consequences of a reform that increased time allocations to review secondary drug patents. For those aspects of this exercise that we can estimate—e.g., the costs associated with expanding review, the downstream litigation expenses that may be saved as a result, and the static welfare gains that may arise from accelerated generic entry—our various back-of-the-envelope findings suggest that the gains from expanding ex ante review greatly outweigh the costs. However, a full accounting of the welfare gains that may ensue from such an investment remain an important task for future research given the need to better understand the welfare implications of the dynamic innovation responses that may result from the accelerated-generic-entry-induced reductions in market sizes.