Complaints about frivolous patent suits abound in academic, business, and policy circles. The focus of the problem is the tendency of businesses, both large and small, to find themselves having to defend against large numbers of lawsuits over junk patents that have issued from the Patent Office but that are actually invalid—a death by a thousand pin pricks created by the lure of occasional high damages awards in cases adjudicated to involve infringement of valid patents. The underlying cause is said to be the relatively modest examination that the Patent Office gives to the vast majority of patent applications before they are issued as patents. In decision-making terminology, the problem is seen as a screening process that is underinclusive.

In response, most popular proposals are directed at ways to segregate patents into two or so bundles, based on whether the patents should be subject to more scrutinizing examination procedures. A so-called "second window of review" has been proposed to let competitors make the choice of which patents get closer examination; a so-called "gold-plated approach" has been proposed to allow patentees to make the election. Both proposals are on top of significant recent changes that have occurred in the underlying substantive criteria for assessing patentability through cases like the KSR International Co. v. Teleflex Inc. decision on obviousness and the In re Bilski decision on permissible subject matter.

One fundamental shortcoming of these approaches is that they do not adequately consider the information costs, error costs, and risks of political capture that accompany any system premised on flexible and discretionary administrative review. The extensive scrutiny they impose leaves some patent applications tied up in the administrative process for too long and some patent applications unduly rejected. A new problem has crept in: the screening process has become overinclusive. Indeed, the system now is both underinclusive, in allowing too many low-quality patents, and overinclusive, in erecting too many barriers to patents. In addition, an administrative stacking problem arises as these enhanced procedures are piled on top of the increased flexibility already injected into the substantive criteria for patentability by recent changes in case law. This combination leaves the system vulnerable to too much flexible discretion, exposing flexibility's Achilles' heel. Flexibility increases the discretion of government bureaucrats, which has the effect of increasing uncertainty rather than decreasing it, and gives a built-in advantage to large companies with hefty lobbying and litigation budgets by making it much easier for them to tie up any patent owned by a smaller innovator. Moreover, these heightened costs of administrative process are imposed without the benefits that generally motivate the case for administrative agencies: the need for judgment calls by leadership.