George Mason University CPIP Blog: Explaining Efficient Infringement, by Adam Mossoff & Bhamati Viswanathan
This post originally appeared in George Mason University CPIP blog on May 11, 2017.
In a recent New York Times op-ed, “The Patent Troll Smokescreen,” Joe Nocera used in print for the first time the term, “efficient infringement.” This pithy phrase quickly gained currency if only because it captures a well-known phenomenon that has been impossible to describe in even a single sentence. Unfortunately, some commentators are confused about the validity of this term. This is understandable, because no one has yet described exactly what it means, especially in comparison to the similar commercial practice of “efficient breach” in contract law.
In a nutshell, efficient infringement occurs when a company deliberately chooses to infringe a patent given that it is cheaper than to license the patent. The reason it is cheaper is what makes it hard to explain briefly: a slew of legal changes to the patent system by Congress, courts, and regulatory agencies in the past ten years have substantially increased the costs and uncertainties in enforcing patents against infringers.