This paper proposes a patent challenge mechanism with partial patent rights previously granted to the patent-holder as the challenge reward. Transferring patent rights to a successful challenger raises the incentive to search for patent-defeating prior art, and, after the discovery of the information, helps deter collusion between the patent-holder and the challenger. It also reduces costly opportunistic patenting and therefore improves patent application quality. However, from an ex post point

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... of view, over-search ensues when the collusion problem is severe. The optimal re-allocation of patent rights, then, calls for a careful balance between these costs and benefits.