Do Patent Challenge Rights Lead to Placeholder Lawsuits?

One of the more curious features of patent law is that patents can be challenged by anyone affected by them, at any time. This challenge right allows potential defendants to file a declaratory relief lawsuit in their local federal district court, seeking a judgment that a patent is invalid or noninfringed. To avoid this home-court advantage, patent owners may file a patent infringement lawsuit first and, by doing so, retain the case in the patent owner’s venue of choice. But there is an unfortunate side effect to such placeholder lawsuits: they escalate the dispute when the parties may want to instead settle for a license. Thus, policies that allow challenges are favored, but they are tempered by escalation caused by placeholder lawsuits. To the extent a particular challenge rule leads to more placeholder lawsuits, it might be disfavored.