From William F. ("Bill") Heinze "I/P Updates" news service, a review of a study of how patent cases are resolved, "How Are Patent Cases Resolved? An Empirical Examination of the Adjudication and Settlement of Patent Disputes," by Jay Kesan and Gwendolyn Ball.

Their findings in a nutshell ...

About 5 percent of patent cases go to trial, and about 8-9 percent are resolved on the merits in summary judgment. Still, "huge transaction costs" are associated with these proceedings.

Most patent cases settle within 12-15 months after the filing of the complaint. They conclude "Our results strongly suggest that patent litigation is largely a settlement mechanism, and hence, any proposed change in the patent laws should be analyzed in terms of the incentives generated for prompt settlement of patent disputes. In addition, entities and interest groups seeking cheaper and/or a greater number of patent rulings concerning validity and infringement will be wise to look elsewhere, perhaps at other patent institutions such as the PTO or at other alternative dispute resolution (ADR) mechanisms that complement the courts."

My comments: This is an interesting bit of datum related to an argument in my recent paper, that addressing quality problems by resolving problems internal to the PTO is not necessarily more costly than by adding procedures and involving more institutions in post-grant reviews.

Also, it strongly reinforces the argument that replacing the usual remedy of an injunction in patent cases with damages determined by a court (originally a provision in the current patent reform package on the Hill, now abandoned) could well be disastrous. It eliminates almost any incentive on the alleged infringer's side to settle at all. Loser pays would be a far better approach to warding off nuisance suits.

posted by Solveig Singleton @ 10:15 AM | Patents

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