Opponents of patent rights continue to propagate the false narrative that large numbers of “bad patents” pose an existential threat to inventors and the future of our innovation ecosystem. The 2024 “Year in Review” article published by the Electronic Frontier Foundation (EFF) is a notable example of this. It claims that to combat a glut of low-quality patents, the USPTO should be stricter about what types of inventions it finds eligible for patents and make it easier to invalidate “dubious” patents. It also argues that inventors should oppose the Patent Eligibility Restoration Act (PERA) to keep bad patents from being issued.
However, the EFF’s arguments rest on a false foundation. Recent research has demonstrated that the U.S. patent system is highly effective, with the USPTO mistakenly granting invalid patents at a very low rate — and that, if anything, excessive restrictions on patenting prevent too many valid patents from being issued:
| Claim: The USPTO has a “persistent problem” with “issuing a countless number [of] dubious patents each year.” |
| In reality: The nonpartisan Sunwater Institute recently conducted a study aiming to count the number of “dubious patents” granted by the USPTO — and found that the percentage of invalid patents granted was very low, in the single digits. Compared to the patent offices of the European Union, Japan, and South Korea, the USPTO boasted the lowest rate of wrongly granted patents. The evidence gathered by the study discredits the idea that the USPTO grants many patents that do not meet statutory criteria. In fact, the more “persistent problem” identified by the study was the number of valid patents that were wrongly denied. The Sunwater Institute found that nearly one in every five valid patent claims was wrongly denied by the USPTO — a troubling statistic indicating that the USPTO’s evaluation of patent applications is often overly harsh. This suggests that patent reforms should focus on ensuring more valid patents are granted, rather than further restricting the patenting process. |
| Claim: The fact that the Patent Trial and Appeal Board (PTAB)’s system of inter partes review has “led to the cancellation of thousands of patents” is evidence of an epidemic of bad patents. |
| In reality: While the high patent invalidation rate at the PTAB is often cited as evidence of the problem of “bad patents,” the Sunwater Institute’s study highlights why this reasoning is fundamentally flawed. Only a small number of issued patents are challenged, and most patent challenges are resolved via settlement rather than by a final judgment. Moreover, because settling is a rational decision whenever the outcome of a case appears fairly certain, the only patents that reach a final judgment are the most uncertain and contentious ones. Therefore, it is to be expected that about half of the challenged patents that do reach a final judgment will be invalidated, and recent years’ PTAB invalidation rates — which range from about 40% to about 60% — reflect this. Additionally, because of the way that patents are selectively filtered throughout the inter partes review process, the patents that reach a final judgment are an inaccurate, biased sample of the larger population of granted patents. That means that the percentage of final judgments resulting in invalidation cannot be used to draw conclusions about the overall percentage of patents that are invalid. |
| Claim: The Patent Eligibility Restoration Act (PERA) “would bring the worst patents back into the system.” |
| In reality:This is inaccurate — the Patent Eligibility Restoration Act would simply reestablish patent eligibility for certain categories of inventions that have wrongly been denied eligibility for the past 15 years. The bill would not alter any of the Patent Act provisions designed to preclude old, unfounded, or “bad” patents from being issued. The bill’s provisions would instead ensure that certain types of inventions, such as medical diagnostics, that were eligible to be patented for all of U.S. history until several misguided Supreme Court cases were decided in the 2010s are again allowed for consideration for patenting—provided that they also meet all of the other statutory criteria. The recent Supreme Court cases that limited eligibility (which PERA would fix) have allowed other countries to surpass the United States in important emerging technology fields. Passing PERA is necessary to ensure America’s continued global competitiveness. At the same time, it presents no danger of increasing the prevalence of “bad patents,” because the inventions it would make patent-eligible would still need to satisfy all current statutory criteria in order to be granted. |