What the authors conclude about the supposed evidence whether the patent system is broken, or not -

Most evidence offered in support of these positions is anecdote, if not myth.

Yet they go on to jump to conclusions, to the grind their own axe that patents are not necessarily economically justified, using a sophomoric metric, backed by irrelevant data.

We measure patents against a simple, well-defined yardstick inspired by economic analysis of property rights. Our yardstick weighs the benefit of patents to an innovator against their cost, including the risk of inadvertent infringement. If the estimated costs of the patent system to an innovator exceed the estimated benefits, then patents fail as property.

The yardstick is broken, as innovators aren't necessarily patent infringers, inadvertent or not. The analysis completely ignores non-practicing inventors, who have no infringement risk; Thomas Edison, for example, this nation's most prolific inventor, with 1,093 patents. Given that the bar of willfulness is set next to the ceiling of "objective recklessness," In re Seagate, practically all infringement is inadvertent.

We can determine, with reasonable accuracy, whether or not patents provide net positive incentives for a given group of inventors.

That was not intended as a laugh line, but if you have a lick of sense about patents, a laugh line is all it is: an econometric boast, all hat and no cattle.

As to risk being a cost -

[P]atents may also impose disincentives on innovators. Litigation costs represent an important disincentive to innovation. A firm looking to invest in innovation will consider the risk that the innovation will inadvertently expose it to a patent-infringement lawsuit.

Yet they have nothing real to back that conclusion; they're just making it up. Their supposed evidence relates to aggregate litigation costs; a non-sequitur to any respectable logician. Logically, if firms hesitated to innovate in the face of patents, there would be a lot less patent litigation.

The authors decry the explosion in litigation costs, but fail to realize that the cause of the explosion directly relates to the perceived value of the properties in dispute, and that firms are willing to risk litigation to stay competitive.

[W]hen we look in detail at what determines the rate of litigation, we find that only a small part of this increase can be explained by measurable factors such as how much the parties to a lawsuit spend on R&D, or how many patents they have. This suggests that most of the increase arises from unmeasured factors that might include legal, institutional and technological changes.

The courts encourage business. Last year's Supreme Court MedImmune decision made the justification for declaratory judgment actions equivalent to the drop of a hat. It is practically impossible for a patent holder to risk licensing negotiations without first filing suit.

The best hope to limit litigation cost is to streamline jurisprudence, allowing venue shopping. Savvy patent holders with a property prefer expeditious jurisdictions, to limit cost and maximize payoff. Only 3% of patent assertions make it to trial; the rest settle. The authors don't go into that.

By definition, patents define unique property. A barrel of apples may contain apples that vary in freshness, with a few rotten apples, but they are all apples. Each patent, tautologically, carves its own domain; its value thus individual. That inherently makes generalizations about the cost/benefit of patents ridiculous. Most patents are worthless; only a very small percentage realize a net return to their holder; and a statistically infinitesimal number are a bonanza to tune of serious money in the tens to hundreds of millions.

Note that patents do provide profits for their owners, so it makes sense for firms to get them. But taking the effect of other owners' patents into account, including the risk of litigation, the average public firm outside the chemical and pharmaceutical industries would be better off if patents did not exist.

The average public firm is not a paragon of innovation. That statement says nothing about the overall value of patents to technological progress.

The big beef the authors have goes to claim construction -

If you can't tell the boundaries, it ain't property.

[O]ur evidence shows that quality problems are more fundamentally connected to problematic boundaries associated with patents that are vaguely worded, overly abstract, of uncertain scope, or that contain strategically-hidden claims.

[I]t is possible for patent owners to hide the claim language that defines patent boundaries from public view for many years, a practice that is becoming increasingly frequent.

The authors seem to think that patents are written in invisible ink. Apparently, 35 U.S.C. §112 isn't on their radar. But, yes, claim construction can be tricky business. To call patents obscure, however, is an academic alchemist's fools gold, casting the grays of reality into fictional black-and-white.

Why are software patents more frequently litigated? In a word, abstraction. Software is an abstract technology, and this sometimes makes it more difficult, if not impossible, to relate the words that describe patent boundaries to actual technologies.

We believe that on average software patents suffer notice problems more acutely than patents drawn from most other areas of technology. There also seem to be large numbers of obvious software patents, aggravating these notice problems. Taken together, these factors probably explain why software patents impose higher litigation costs than other types of patents.

Here, the authors inadvertently promote Patent Hawk, this nation's premier software patent invalidator. In the wake of Obzilla, and the current strict USPTO patent examination regime, however, the problem of "large numbers of obvious software patents" is a reminiscence, in terms of significance to the patent system.

The book is exactly what one would expect of a book praised by Prof. Mark Lemley: overwritten and under-thought out. But maybe that's to be expected of publish-or-perish academics with too little gray matter.