Low-Quality Patents in the Eye of the Beholder : Evidence from Multiple Examiners

A low-quality patent system threatens to slow the pace of technological progress. Concerns about low patent quality are supported by estimates from litigation studies suggesting that the majority of patents granted by the U.S. patent office should not have been issued. This paper proposes a new Bayesian method for measuring patent quality, based on twin patent applications granted at one office but refused at another office. Our method allows us to distinguish whether low-quality patents are issued because an office implements a (consistently) low standard, or because it violates its own standard. The results suggest that quality in patent systems is higher than previously thought. In particular, relative to the own standard of each office, the percentage of mistakenly granted patents is under 10 percent for all offices. The Japanese patent office has a greater percentage of mistakenly granted patents than those of Europe, the United States, Korea and China, largely because it has a higher standard