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New Research Finds That Getting a Patent is Becoming More Difficult

NYU Stern Professor Deepak Hegde’s findings challenge conventional wisdom that US Patent & Trademark Office rubber stamps applications without scrutiny

Deepak Hegde_article

Just as having a lenient process that approves applications without scrutiny can impose costs on our innovation system, an allowance rate that is too low may deter inventors – particularly those that cannot engage in costly negotiations with patent examiners – from seeking patents, or worse still, investing in innovation.”

In a first-of-its-kind study, NYU Stern Professor Deepak Hegde and his co-authors, Michael Carley and Alan Marco of the US Patent and Trademark Office (USPTO), calculate the probability of receiving a US patent and find that approval rates have declined significantly.

The researchers analyzed the histories of the 2.15 million new patent applications filed at the USPTO between 1996 and 2005. The patent examination process can take several years, so the researchers tracked the applications from the date they entered the USPTO through June 30, 2013, by which time 99.8% of the applications had exited the system as a patent or were denied or withdrawn.

Key findings include:
  • Only 55.8% of original patent applications filed from 1996-2005 at the USPTO were approved
  • Patent approval rates declined from 70% for applications filed in 1996 to 40% for applications filed in 2005
  • Applications in the “Drugs & Medical Instruments” sectors have the lowest average approval rates (42.8%)
  • Applications in the “Electrical & Electronics” fields had the highest patent approval rates (66.6%)
  • Success rates are lower for small firms across all technology fields
  • Approval rates are driven by both the USPTO’s decision to reject applications after examination, as well as by the applicants’ decision to withdraw their applications
“We find no evidence that the USPTO rubber stamps patent applications, let alone that it is becoming increasingly lenient in granting patents,” says Professor Hegde. “This comes as a surprise since many experts are blaming the US patent system for granting patents too easily, thus making it easy for patent trolls to assert their patent rights.” Professor Hegde also cautions policy makers when interpreting patent approval rates: “Just as having a lenient process that approves applications without scrutiny can impose costs on our innovation system, an allowance rate that is too low may deter inventors – particularly those that cannot engage in costly negotiations with patent examiners – from seeking patents, or worse still, investing in innovation.”

The article, “What is the Probability of Receiving a US Patent?” is forthcoming in the 2014 Winter issue of Yale Journal of Law & Technology.