How do markets respond to patents? A patent is a well-defined property right, at its best. And the legal right can be bought and sold. It can be rented. It can be inherited, just like an iPhone or a house or a car. So, that’s how a well-functioning patent system tells us markets react to patents. What happens when you go into the PTAB? Patent Trial and Appeal Board review was created to test the merits of the patent. So, the market and individuals in the market know that when somebody challenges a patent in the PTAB they are much more likely to invalidate it than if they challenged it in the courts. Anybody who comes after a drug patent, the markets will know that this is a problem and the stock price of the company that owns the drug patents is going to react accordingly. Drug patents tend to be very valuable because there’s only a few of them. Five or six patents will cover a pharmaceutical drug. If you want to find out the patent portfolio that covers an iPhone, well that might be dozens or even scores of patents. So, if you lose one, not the end of the world. If you lose a drug patent, that’s like having one of your crown jewels stolen from the throne room. There’s a really widely reported instance of somebody using PTAB review to make a very strategic move in the market and it goes a little bit like this. You identify the patent. You send the company a letter saying, “I’m going to challenge your patent in the PTAB unless we settle this dispute right now and you pay me $500,000.” The company might say, “Yes. We know our patents are vulnerable. We’ll pay you.” That’s not very smart in the long run because you’ve just announced to all the holdup artists in the world that you’re open for business. So, more likely the drug patent-owning company will say, “No. We’re not going to pay ransom. That’s not what we do here.” So, the person who’s challenging says, “Okay. I’m going to short sell your stock, file a challenge, and as soon as I file the challenge, your stock price is going to plummet. That’s when I consummate my short sell. I’ve made my money.” Even if the lawsuit doesn’t go anywhere, the volatility of the market, short-term volatility, is what the person who’s challenging is making their money on. That’s actually a strategy that a lot of legal scholars have heard about and have criticized because it appears to just take flagrant advantage of the process without any regard for the merits of the patent.