Are Litigated Patents More Valuable?

It has been suggested that patents burden open, user, collaborative, and free innovation even though they tend to claim trivial inventions lacking much value other than as weapons to extract rents from true innovators through... [ view full abstract ]

It has been suggested that patents burden open, user, collaborative, and free innovation even though they tend to claim trivial inventions lacking much value other than as weapons to extract rents from true innovators through aggressive and costly litigation. We test the hypothesis that litigated patents tend not to be valuable. Various correlates of patent value, influence, and importance have been proposed. These include payment of maintenance fees, size of patent family, number of claims, and how frequently a patent has been litigated. We test two hypotheses: (1) litigated patents tend to be more important than average; and (2) patent importance rises with the level of court (that is, district court, Court of Appeals for the Federal Circuit, and United States Supreme Court) patent litigation reaches. Citations are widely regarded as useful indicators of the technological importance of inventions disclosed by patents, as well as of the economic value of that patent. Using a hierarchical method of analysis, we constructed a graph of the complete citation network of all United States patents issued from 1976 to 2014, and assigned every node (that is, an individual patent) an objective importance score. We set the mean importance score for all patents to 1.0. Importance scores scale directly with numerical value, so 10.0 indicates a patent ten times as important as the mean and 0.1 indicates a patent only one tenth as important as the mean. Using a dataset of patents litigated to a decision at a district court, the CAFC, and the Supreme Court from 2000-2014, and patent importance scores assigned to each litigated patent, we tested hypotheses (1) and (2). Our results indicate that patents litigated in district court have a mean importance score of about 4.5, those litigated in the CAFC have a mean importance score of about 6.5, and patents litigated in the Supreme Court have a mean importance score of about 8.3. This suggests that (1) litigated patents do appear be considerably more important than average and (2) patent importance rises markedly from district court to CAFC to Supreme Court. In light of previous studies linking patent importance to patent value, our results suggest that litigated patents tend to be valuable patents.