which oppositions were filed at the EPO. We also constructed a random sample of EPO patents with no opposition in these technologies. We matched these EPO patents with the “equivalent” U.S. patents covering the same invention in the United States. Using the matched sample of U.S. Patent and Trademark Office (USPTO) and EPO patents, we compared the determinants of opposition and of re-examination. Our results indicate that valuable patents are more likely to be challenged in both jurisdictions, but the rate of opposition at the EPO is more than thirty times higher than the rate of re-examination at the USPTO. Moreover, opposition leads to a revocation of the patent in about 35 percent of the cases and to a restriction of the patent right in another 33 percent of the cases. Re-examination results in a cancellation of the patent right in only 10 percent of all cases. We also find that re-examination is frequently initiated by the patentholders themselves.

INTRODUCTION

Beginning in the 1980s, a series of administrative, judicial, and legislative actions strengthened the economic value of U.S. patents and extended their coverage in such areas as computer software and “business methods.” Although many of these actions were undertaken at the behest of the U.S. business community, concerns have been raised since the early 1990s about the potential economic burdens of low-quality patents in an environment of greater deference to the rights of the patentholder (Merges, 1999; Barton, 2000). A number of experts have suggested that the U.S. patent examination system does not impose a sufficiently rigorous review of patent and nonpatent prior art, resulting in the issuing of patents of considerable breadth and insufficient quality. Many of these critics advocate the reform or extension of procedures that would enable interested parties other than U.S. Patent and Trademark Office (USPTO) examiners to bring relevant information to bear on this process either before or shortly after the issue of a patent. However, much of this debate has occurred in an empirical vacuum. Little is known about the characteristics or effectiveness of existing procedures for such post-issue challenges within the U.S. patent system, and virtually no research has compared the characteristics or effects of U.S. post-issue challenge procedures with those available elsewhere in the industrialized world’s patent systems.

At present, the primary procedure for such a challenge to the validity of a U.S. patent is the re-examination proceeding, which may be initiated by any party during the life of the patent. A more elaborate and adversarial procedure in the European Patent Office (EPO) is the opposition process. This chapter uses new data in an exploratory comparative analysis of these post-issue challenge proceedings, pursuing two main questions:



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