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Patent Quality, Post-Grant Review, And the GAO Report on Patent Litigation

By Michael R. Fleming

One of the many elements of the sweeping America Invents Act of 2012 (AIA) was a directive to the Government Accountability Office (GAO) requesting a report on factors affecting patent litigation. In particular, the GAO was charged with assessing the extent to which so-called “patent trolls” were damaging patent litigation in the United States. This arose from concerns voiced by some that patent trolls, or non-practicing entities (NPEs), were buying patents on technology and software they had no intention of actually producing in order to bring nuisance suits against companies and others in an attempt to secure settlements and licensing agreements. Essentially, patent trolls were accused of abusing the patent system to build a revenue stream based on forcing companies to pay up or risk potentially expensive litigation.

The GAO released its report in August. Perhaps surprisingly, the GAO found that NPEs were not the main contributor to alleged problems with patent litigation in the United States. Instead, the GAO concluded that poor patent quality was to blame for most nuisance infringement suits. Its analysis showed that companies that make products brought most of the patent infringement lawsuits and that non-practicing entities brought only about 20% of all lawsuits. The GAO report also concluded that rather than focusing on the identity of the litigants, emphasis should be placed on improving the quality of issued patents and the examination process in order to strengthen the U.S. patent system. See the report at'http://1.usa.gov/17QD7Uw.

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