Monday, 10 August 2015

Can the death of a patent be a sign of life for the patent system?

The IAM Blog carries a fascinating feature by Jack Ellis, "The companies that abandon most US and EPO patents – and shoulder much responsibility for raising quality", which introduces an article in IAM's most recent issue. That article, "Assessing patent renewal decisions in the United States and Europe" by Matthew Beers and Maria Lazarova (Ocean Tomo), represents a welcome appraisal of a facet of the patent system that is ignored, misunderstood or underrated by many. But why is this subject so important? Let's explain.

Apart from granted patents, encouraging investment on the basis of the protective shield that covers all or part of a technological innovation, the other obvious by-product is the public domain: inventions that have been published and in respect of which any patent that once existed has now expired.  With the odd exception (second medical uses of products with already-known medical application being the main one), once something is in the public domain it remains there forever and can be freely used without restriction.
The public domain is a vast body of largely focused information, much of which can be conveniently searched online and which is organised according to the principles of the Intellectual Patent Classification scheme. In it can be found much information that directly addresses researchers' needs, since it can demonstrate that a specific problem has already been solved. It is however unpopular for two reasons. The first is that much of it is obsolete and relates to devices and processes that are no longer used; the other is that, since everyone can use it without restriction, there is no effective protection to support a commercial decision to invest, where the first business to make and market a public domain-based device incurs expenses that me-too competitors do not face.

Lapsed and lapsing patents and patent applications are arguably an important sub-class of their own. Apart from their technical content, they provide a wealth of information about the business decisions taken by those who have initially filed for them and then let them go.  They also provide a sort of snail-trail that describes the path taken by a technology as its players try out new product lines, new manufacturing techniques and so on.  Taken in bulk, the abandonment figures look large and might be viewed as a problem in terms of wasted effort by competitors in the market and resources consumed in vain by patent-examining offices. 

Is there any need to be despondent about this waste? No.  It exists wherever competition within and between products can be found. Whether there is a good patent system, a bad one or none at all, you will still be likely to find businesses committing resources towards developing the same products or creating processes that achieve the same objectives. One will always be ready first and that fact can render the investment by others theoretically wasteful. Most products do not succeed in the market place, just as most brands do not become successful and most trade marks on the register are of little or no commercial value. 

If lapsed patents can be a sign of health, not malaise, how much more so can patents that have not yet lapsed (and applications that have not yet been abandoned) be said to be a sign of vitality in the patent system? They may have both positive and defensive value and, whether taken individually or in bulk, may complement an existing portfolio, giving it strength and depth,  Market Square IP has already set out its stall as an advocate of lapsing patents and applications being an asset class in their own right, and there may be others out there who are saying the same thing. 

1 comment:

  1. Interesting points made here. The financial and investment side of investing in lapsing patents and applications will remain a problem though since financial institutions will be unnerved by the vast differences in how patents work in different sectors, meaning that they can't easily draw lessons from their own experiences as lenders in one sector and transfer them to another.