Patent Law

Unsettling

By Gary Odom and Jordan Kuhn

The application of statistics is relatively simple. Statistics is taught at college for many fields. But properly applying statistics seems to elude many. A recent patent reexamination analysis by lawyers is exemplary: a small sample size of biased data, rendering it rather meaningless. But the statistically-challenged authors reported the results as conclusive. Another study, on civil lawsuit settlements, suffers the same flaw. There at least the authors admit the data base as flawed, but regardless paint a brave face on tainted data.

The civil lawsuit study, reported in the New York Times and ABA Journal, purports to show that, statistically averaged, it's better to settle than go to trial. The problem with the data is intrinsic to the problem studied: the study ignored settlements, because the data was not available, and would have not been statistically helpful anyway. Most settlements remain confidential. So, all the data is based upon suits that went to trial, then used hindsight of settlement offers before trial. It would, of course, be impossible to say, for settled cases, what going to trial would have meant, so that data is conveniently ignored.

The results were that plaintiffs got the short end of the stick by going to trial more often than defendants. The report points to contingency law firms for plaintiff error, and lack of insurance for defendants. Don't give any of that credence.

As with many exercises in cumulative averaging, the numbers ignore reality. Civil lawsuits are a heterogeneous set. They differ by type and circumstance so broadly as to make an apples-and-oranges comparison while pretending to be looking at only raspberries. Fruity and fruitless.

The most interesting point made regards risk skewing: perception of risk based upon situation. People expecting a gain are more risk adverse, but those facing loss more willing to gamble. Risk skewing partly explains conservatism and terrorism.

What isn't so easily explained, other than lack of proper education, itself apparently a rarity, is why there are so many are so statistically challenged folk putting up such worthless numbers in the first place, and then for those numbers to be given credibility by admiring publication. Chances are somebody got paid to fiddle numbers, and somebody got paid to report them. Statistically speaking, stupidity and corruption appear a winning combination.

Full post as published by The Patent Prospector on August 26, 2008 (boomark / email).