Not to defend the patent system too much, my experience with it mostly involves a second parties trying to patent ideas that others came up with, but there seems to be a bit of a selection effect problem here. Of all the people who consider copying something patented, some fraction of them are stopped by the presence of the patent. Of all the people who independently invent something you would expect only a very small percentage to be stopped by a patent. Also, someone who knowingly copies someone else's work knows to hide the fact.
So unless we know what percentage of people were stopped from copying someone else's work without the need for a lawsuit, this study alone doesn't tell us very much about the social costs and benefits of patents by itself. I tend to believe that our patent system is too strong and I might very well mention it in discussions with proper caveats, but we need more research.
This research doesn't tell you much concretely about the benefits of the patent system that might be lost in any potential reform, but it certainly says something about the costs that it imposes right now: clearly lots of people get sued over things they invented independently. In fact, in the overwhelming majority of cases not involving chemicals or pharmaceuticals, the people being sued (and thus punished) are independent inventors. It's hard for me not to conceive of "people getting sued over things they invented/created completely independently" as anything other than a pure cost to society, and the research in this paper makes it pretty clear that most patent lawsuits fall into that category of "pure cost to society."
It also does say something about the "benefits" of the patent system, though less strongly: clearly if the vast majority of people being sued in particular industries are independently inventing things, that means that the knowledge transfer benefits of patents in those industries is likely over-stated by pro-patent lobbies.
In the eyes of the (US) law, independent invention is no excuse for infringement. The patent holder has an absolute right to exclude others from practicing the invention.
In other words, in the race to invent and patent, first place gets a big prize, second place is the first loser.
Is the title statement taken from their argument in section "Data on Allegations of Willfulness" where they propose that since in 70% of the cases patent holders did not notify defendants of the patent violation than it is safe to assume that the defendants did not know they were violating a patent? That seems like a faulty logic to me.
No, it's based on their extensive analysis of the cases and all documentation associated with those cases that tries to discern if there are even mere allegations by the plaintiff that the patent infringement was due to any manner of copying. Their stats show that, aside from pharmaceutical or chemical patents, the number of patent cases in which copying is even alleged at any point is very small (i.e. a few percentage points).
One could argue that perhaps that low incidence is simply due to people not bothering to allege copying since it isn't relevant to if infringement occurred. The authors suppose that that's unlikely, since copying is highly relevant to the question of whether or not willful infringement occurs, and their limited evidence suggests that findings of copying do in fact tend to lead to findings of willful infringement. To test that hypothesis, they gathered up an additional 102 cases where evidence of copying was found and found that in nearly 2/3 of them copying was alleged by the plaintiff. (pp. 28-29 in the pdf). That would seem to be fairly strong evidence that if a plaintiff has actual evidence of copying they're highly likely to allege copying somewhere in their complaint.
Thus, it's a reasonable conclusion that since only 10% overall of patent litigations involve even allegations of copying (and far fewer for anything outside of pharma or chemical patents), that most cases where there's actual evidence of copying result in such allegations, and that allegations themselves are merely an upper bound on actual copying (since the allegations may well be untrue), that there's actually not much copying going on, which means that most of the inventions being sued over were produced independently rather than through any kind of "copying" or "theft."
So why can't the FDA just not grant those special copying-based expedited approvals for the first X years after approving whatever's being copied, rather than the copying being evidence that we need to keep a patent system?
So unless we know what percentage of people were stopped from copying someone else's work without the need for a lawsuit, this study alone doesn't tell us very much about the social costs and benefits of patents by itself. I tend to believe that our patent system is too strong and I might very well mention it in discussions with proper caveats, but we need more research.