Is there a tradeoff between average patent pendency and examination errors?

It is now common knowledge that the United States Patent and Trademark Office (USPTO) takes too long to process patent applications and that examiners make too many errors in the patent approval process. Given these twin concerns, we study the following question in this paper. Should the director of an organization such as the USPTO have a small number of examiners examine incoming patent applications less stringently or should this director have a large number of examiners examine the same patent applications more stringently? We employ a simple queuing model and show that if decreasing the average patent pendency is crucial then it makes more sense for the director to select the less stringent patent examination regime. In contrast, if reducing the number of examination errors in the patent approval process is more important then the director ought to choose the more stringent patent examination regime. © 2006 Elsevier Inc. All rights reserved.