A Reality Check for Patent Quality Critics

COMMENTARY

The Trump administration will soon announce new leadership at the U.S. Patent and Trademark Office, the relatively low-profile but hugely influential federal agency that evaluates patent applications and sets intellectual property policies that affect the entire economy.

The next USPTO director will have many issues to address, not least of which will be the loud agitation of activists who believe that the USPTO issues too many low-quality patents.

But before federal policymakers cave to these activists and impose new regulations to crack down on the supposed torrent of “bad patents,” they would do well to recognize one crucial fact: the existence of a patent quality crisis is contradicted by the data.

In fact, a recent study from the nonpartisan Sunwater Institute found that when it comes to weeding out inventions that should not be patented, the USPTO is already world-class.

The study used three separate, statistically supported methods to determine how frequently the USPTO grants patents that fail to meet statutory requirements. All three analyses found that the USPTO’s rate of “bad patent” grants is in the single digits. 

And the USPTO performs every bit as well as its counterparts in the European Union, South Korea and Japan.

That’s not to say the agency is perfect or that no reforms are warranted. But policymakers weighing reforms need to first recognize the reality that “bad patents” are the exception, not the rule.

The system fundamentally works.

Strong patent protections are what enable America’s inventors, entrepreneurs and startups to raise funding, invest in research and development, and turn today’s bright ideas into the technological marvels that will continue to propel America’s global innovation leadership tomorrow.

Patents dramatically improve the odds of a company being able to take its invention to market. Startups that own a patent are 47% more likely to raise venture capital funding and 84% more likely to be acquired; the temporary market exclusivity conferred by a patent helps assure potential investors that they’ll be able to earn a return.

Intellectual property (including patents) also has other, broader benefits. Industries that rely on intellectual property protections account for over 40% of U.S. economic production and support 44% of jobs. Protecting innovation powers America’s economic engine.

With the Sunwater Institute’s study demonstrating that U.S. patents are overwhelmingly high quality, there’s no reason to think our economy would benefit from harsher restrictions on patenting. Such policies would only harm the ability of legitimate inventors to compete in the market and protect their patented products from theft by infringers.

Of course, our patent system still has room for improvement. The Sunwater Institute’s research highlights one area where policymakers can make a positive difference.

According to the study, the USPTO wrongly denies valid patent claims at a rate of 18% — meaning nearly one in five rejected patent claims meets all the statutory criteria for patentability. The USPTO is more than twice as likely to deny a valid patent claim as it is to approve an invalid one.

This leads to thousands of meritorious inventions being discarded each year for no good reason.

It’s economic self-sabotage. 

China currently leads America in 37 out of 44 critical and emerging technologies, according to a recent study. Regaining the technological lead will require the United States to harness all the contributions its inventors make, not just some of them. That cannot happen without a robust intellectual property system.

The United States stacks up well against our peers when it comes to keeping out “bad patents.” But to succeed in the battle for 21st century technological supremacy, we’ll also need to ensure that we do not keep out good patents. The incoming administration and USPTO leadership can achieve this by strengthening patent protections and rejecting false narratives about the prevalence of low-quality patents.

Ensuring that every invention that meets the statutory standards can successfully obtain a patent is a critical part of empowering American researchers and businesses — and ensuring that the next world-changing technological breakthroughs happen in the United States.

Andrei Iancu served as the undersecretary of commerce for intellectual property and director of the U.S. Patent and Trademark Office from 2018 to 2021. The council can be found on X.

David Kappos served in the same offices from 2009 to 2013. Both serve as board co-chairs of the Council for Innovation Promotion. The council can be found on X.