This paper considers patent granting as a two-tiered process, which consists of
patent office examination (public enforcement) and court challenges (private enforcement).
It argues that, when the patent-holder has private information about the patent
validity, (i) a weak patent is more likely to be settled and thus escape court challenges
than a strong patent; and (ii) when the economy suffers from the low patent quality
problem, a tighter examination by the patent office may strengthen private scrutiny
over a weak patent. Both work against Lemley (2001)’s hypothesis of a “rationally
ignorant” patent office
