Complexities in utilizing the patent pilot program as shock to judicial efficiency felt by firms

The paper by Kim, Shi, and Verdi (2025) examines how judicial efficiency—as defined by the court’s ability to resolve patent cases quickly and in a manner that is mutually agreeable to both parties in the lawsuit—affects the incentives of corporations to innovate. The authors utilize the Patent Pilot Program (PPP), which routed patent cases to PPP-designated judges in select districts to facilitate efficient rulings, as a shock to judicial efficiency. The authors find that firms headquartered in counties subject to the PPP increase patent-based innovation by 6.1 %–6.9 %, relative to firms in counties not under the program. However, there are aspects of patent litigation that complicate the ability to neatly divide firms into treated (those who feel the effects of increased judicial efficiency associated with PPP districts) and non-treated (those that do not). The difficulty in identifying treated and untreated firms confounds the ability to interpret the increase in patent-based innovation incentives for firms headquartered in PPP judicial districts.