Advantages And Disadvantages Of Patent System

Most of the studies of the patent system conducted by economists assume that the agency in charge of granting and managing the system functions with perfect efficiency-that is, that there are no transaction costs imposed by the patent system. Thus, in theory, the patent acquisition and enforcement system, as a whole, is a black box that works perfectly. In practice, however, the Patent Office has been subject to harsh criticism over its procedure for granting patents. First, the Patent Office's process for reviewing patent applications may not involve an adequate search for relevant prior art in different technological fields.' Compared with other patent offices, such as those in Japan and the European Union, the USPTO has high rates of acceptance and low levels of review. Second, the USPTO is not free from political influence. Important interest groups that exert pressure on policymakers in Congress and the USPTO directly shape patent policy. Finally, the laws and regulations that dictate the behavior of the USPTO do not provide

First, because there is no requirement for information disclosure early in the granting process, the inventors' technology remains protected.' Second, firms cannot use the opposition system to block the grant of competitors' patents.' Challenging a patent is only available after the patent is granted, thus avoiding this problem of pre-grant systems. Third, for some patents, the decision to challenge a patent can change over time. For example, a firm can patent an obvious technology that is not challenged initially because of the small value of the patent. Later, however, this patent could become both valuable and harmful to competing firms. Therefore, having a post-grant system could help provide an inexpensive challenge system for some time after a patent is issued. Nonetheless, for any pre-grant or post-grant system, challengers may still contest a "bad" patent in