Why should this be so? According to Berman, "patent reform and uncertainty are the most likely reasons why". This may well be so, but it never hurts to add a few further considerations.
Pebbles in the Patent Pond
First, while there is no doubt that a substantial level of uncertainty exists, over statutory patent reform, the vicissitudes of Federal Circuit decisions and the Olympian rulings from the US Supreme Court, those with long memories will recall that uncertainty has existed almost continuously since the 1960s: factors such as the makeover of BIRPI and its rebirth as a policy-sensitive, proactive WIPO; the introduction and growth of the Patent Cooperation Treaty's system, the constant battles to establish international norms that adopt or reject grace periods, the replacement of GATT by the World Trade Organization with the compulsory acceptance of TRIPS, the emergence of the European Patent Office and other regional patent administration authorities, the admission of Russia and then China to the family of patent-granting nations, Doha and the prospect of loss of control of pharma patents, plus experiments with peer-to-patent and the Patent Prosecution Highway -- all of these have fuelled speculation, raised or dampened expectations, diverted or concentrated investment and generally cast pebbles into the Patent Pond, causing ripples that continue to affect the innovation community long after their initial impact.
Ripples take time to spread. When we talk of a fall in patent grants in 2015, we must remember that granted patents may have a lengthy gestation period and that a full explanation may require investigation of all sorts of other factors that are not immediately visible in 2015 itself. These factors will include considerations such as how many applications were actually filed in the preceding years, which in turn may be governed by considerations such as the availability of investment cash for early stage research and/or knocking a concept into a viable product or process. Businesses may also hold up on pressing to protect the outcome of ongoing research when competitors or consumers signal a paradigm shift by opting for a new technology standard that was previously too expensive or inconvenient.
Even where it is possible to grow one's own patent portfolio from one's own resources, other options exist. That is why it is a worthwhile exercise to measure any decline in patent filing and grant against what it is that companies decide to put into their shopping baskets: are they acquiring patent portfolios from startups, allies or competitors? Are they buying into FRAND-based technical standards instead? Are they shifting towards reduced control but faster product development through open innovation-based product design?
This blogpost will not attempt to answer any of the questions it has been posing. It will however offer a couple of graphics, reflecting the nature of the decline in patent grants both from 2013-2014 and from 2013-2015.
Below are a couple of tables that flesh out the recent trend with some solid numbers. The first simply charts year-on-year changes.