Jaffe/Lerner live on in 12 YALE J.L. & TECH. 240 (2010)

Footnote 3 of QUANTIFYING THE COST OF SUBSTANDARD PATENTS:
SOME PRELIMINARY EVIDENCE states


For a summary of the ills of the modern patent system and critiques against it,
see ADAM JAFFE & JOSH LERNER, INNOVATION AND ITS DISCONTENTS: HOW
OUR BROKEN PATENT SYSTEM IS ENDANGERING INNOVATION AND PROGRESS,
AND WHAT TO DO ABOUT IT (2004). As the National Research Council of the
National Academies noted, “patents on trivial innovations may confer market
power or allow firms to use legal resources aggressively as a competitive
weapon without consumer benefit.” NAT’L RESEARCH COUNCIL OF THE NAT’L
ACADS., A PATENT SYSTEM FOR THE 21ST CENTURY 95 (2004).

Of interest to this author was the reference to Cecil Quillen on patent grant rate:

Grant rates are highly contested figures. See, e.g., Cecil Quillen & Ogden
Webster, Continuing Patent Applications and Performance of the U.S. Patent
Office, 11 FED. CTR. BAR J. 1 (2001) (“The Grant Rate (allowances divided by
total disposals, i.e., the sum of allowances and abandonments) for the USPTO
for its fiscal years 1993-1998, corrected for continuing applications, ranges from
87% to 97%, depending on the extent to which prosecution of abandoned
applications was continued in re-filed applications. Reported Grant Rates for
1995-1999 for the European and Japanese Patent Offices (averaged) are 67%
and 64%, respectively.”).

The Yale authors apparently didn't read 4 CHI.-KENT J. INTELL. PROP. 108:

In recent proposals for patent reform made by the Federal Trade Commission and by the National Academy
of Sciences, there has been discussion of the possibility that the grant rate of patents by the United States
Patent and Trademark Office [USPTO] is high compared to that of other industrialized countries, including
that of Japan and those of Europe. This discussion began with papers of Quillen and Webster that
suggested that the grant rate might be as high as 97% and more reasonably is at least 85%. Although the
actual grant rate at the USPTO is typically in the range 62% to 68%, Quillen and Webster suggested the
higher numbers based on an analysis of continuing applications (including continuations, divisionals, and
continuations-in-part). The present paper suggests that the analysis of Quillen and Webster is flawed both
legally and methodologically

The Yale authors' punchline is related to patent citation numbers!

Further, Trajtenberg
argues that cited patents, and not simple patent counts, are
correlated with patent value. In his data, about half of patents are
not cited, again suggesting that about half of patents may be
classified as substandard.72 Finally, Jaffe and Lerner summarize
evidence from the OECD indicating that the growth rate of USPTO
granted patents is twice that of “economically significant” (or
triadic) patents.73

Assuming 50% of filings are substandard and there are
400,000 filings per year, there are about 200,000 substandard
patent filing at the USPTO annually.74 At an average cost of $7500
per application, the annual deadweight loss from administrative
costs related to the acquisition of substandard patents is $1.5
billion. While this is certainly a large number and a significant cost
of substandard patents, it is far below the deterrence caused by substandard patents.