More on Rational Ignorance at the Patent Office

Professor Mark Lemley has promoted an idea of “rational ignorance” at the patent office. In his now famous article, Lemley argues that patent examiners should not attempt to completely search all prior art because such searches would be too expensive. Thus, according to Lemley, the patent office should issue patents even when there is a substantial likelihood that prior art could be found by mounting a more thorough search. Because the vast majority of patents are never litigated, Lemley argues that good cost saving measure is to perform a minimal search during patent prosecution and delay a more complete search until the time of litigation (if any).

In their recent article Professors Ghosh and Kesan take issue with Lemley’s results. Although they agree with proposition that the “USPTO cannot be omniscient,” Ghosh and Kesan question Lemley’s empirical bases.

But we question his basis for determining how much the USPTO should be expected to know and not know. This inquiry rests on an assessment of the social benefits of patents, not just on the private decision of the USPTO and its examiners. We would agree with Professor Lemley that simply devoting more time to patent review is not the solution. But Professor Lemley frames the debate as a choice between administrative restructuring and more extensive judicial review. He opts for the latter because so few patents are actually litigated, and therefore the benefits from reduced litigation are not justified by the increased costs in administrative review. We contend that such an argument ignores (in neither a rational nor an optimal way) the benefits of a patent system. It is far from clear that more extensive judicial review is more effective than some restructuring of the USPTO in terms of more careful scrutiny or more rigorous assessment and accumulation of the prior art. The judicial option is more dubious in light of the USPTO’s mandate of promoting progress and its practical purpose in resolving the revelation and appropriation problem. Professor Lemley provides an assessment of the private and social costs without proper attention to private and social benefits.

What Do Patents Purchase?: In Search of Optimal Ignorance in the Patent Office, with S. Ghosh, 40 HOUS. L. REV. 1219 (2004).

Conclusions: Improved prior art searching at the patent office can be accomplished through a combination of improved information systems and increased funding for Patent Examiners. There is certainly an optimal limit to searching by the patent office. However, we have been given no indication that the limit has been reached.

Update: LB Ebert has more criticism of Lemley here.