%0 Report
%9 Working Paper
%A Chiou, Jing-Yuan
%D 2009
%F eprints:98
%I IMT Institute for Advanced Studies, Lucca
%K Collusion, Patent Challenge, Patent Quality.
%T The Design of Post-Grant Patent Challenges
%U http://eprints.imtlucca.it/98/
%X This paper proposes a patent challenge mechanism with partial patent rights previously  granted to the patent-holder as the challenge reward. Transferring patent  rights to a successful challenger raises the incentive to search for patent-defeating prior  art, and, after the discovery of the information, helps deter collusion between the  patent-holder and the challenger. It also reduces costly opportunistic patenting and  therefore improves patent application quality. However, from an ex post point of view,  over-search ensues when the collusion problem is severe. The optimal re-allocation of  patent rights, then, calls for a careful balance between these costs and benefits.    
%Z JEL codes: K40, O31, O34.