Patents as a regulatory tool - UNECE Homepage · Patents as a regulatory tool What patent offices...

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Patents as a regulatory tool What patent offices can do to promote innovation Nikolaus Thumm (European Patent Office) UNECE Team of Specialists on Intellectual Property 'Intellectual Property and Competition Policy' Geneva, 21 June 2012 Chief Economist

Transcript of Patents as a regulatory tool - UNECE Homepage · Patents as a regulatory tool What patent offices...

Patents as a regulatory toolWhat patent offices can do to promote innovation

Nikolaus Thumm (European Patent Office)

UNECE Team of Specialists on Intellectual Property'Intellectual Property and Competition Policy'Geneva, 21 June 2012

Chief Economist

Patent Protection,Finding the Right Balance

More transparencyPatent Info availableNo incentive for R&D

Market powers failFree riding

Temporary monopolyAccess limitation to IP

without patents with patents

Patents (IP) as a regulatory measure

Protection

Welfare

Problem area?

Too much protection?

Not enough protection?

Feasible measures

Too much protection?

• Limiting research?• ‚Anti-commons‘• Patent thickets• Royalty stacking• Abuse of dominant market poistion (Myriad)• Quality of grant examination?• Trivial patents • General inventiveness

Background

0

50 000

100 000

150 000

200 000

250 000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

European Patent Filings (1991- 2011)

Total Filings 244 372

Euro PCT Int. Phase

181 813

Euro Direct 62 559

• Increasing integration of IP in top-level business strategy, especially in high-tech industry

• Increasing strategic use of IP information (technology, market and technology watch)

• Increasing exploitation of IP value as additional source of revenue and benefits (licensing, patent auctions etc.)

• Upcoming legally binding rules to report on IP (e.g. accounting rules)

• IP enforcement (litigation, etc.) with increasing economic impact on companies (revenue, profitability, stock performance, etc.)

Increasing economic importance of industrial proper ty (IP)

Importance of patenting

New inventions versus multiple fillings

Source: WIPO, Mosahid Khan, EC presentation June 2011

0

400,000

800,000

1,200,000

1,600,000

Typ

es o

f App

licat

ion

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Year

Resident First Filing Non-Resident First Filing Resident Subsequent Direct FilingNon-Resident Subsequent Direct Filing Resident Subsequent Other Filing Non-Resident Subsequent Other FilingResident Subsequent PCT NPE Non-Resident Subsequent PCT NPE

Contribution first & subsequent filings to total gr owth

Source: WIPO, Mosahid Khan, EC presentation June 2011

First Filings: 71.3%Subsequent Direct and Other Filings: 20.4%Subsequent PCT National Phase Entries: 8.3%

First Filings: 48.3%Subsequent Direct and Other Filings: 7.1%Subsequent PCT National Phase Entries: 44.6%

First surge period, 1983-1990 Second surge period, 1 995-2007

The value of patents

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

Kum. Anteil der Patente, geordnet nach Wert

Erfas

ster

Ges

amt-P

ortfo

liow

ert,

%

Cumulated share of patents, ordered by patent value

80%are

“irrelevant“

5% really matter

15% matter a

bit

Sha

re o

f por

tfolio

val

ue, %

Data for about 7000 EP-patents. Source: European research project ‚PATVAL‘.

General findings (EPO/OECD survey 2007)

• 20% of European patent owners license out• Firm size: licensing activity U-shaped• Companies from Nordic countries and UK license out more

Motives for licensing out patents:1. Earning revenue2. Entering into cross licensing deals3. Stop others from infringing your patents4. Sharing technology with other companies

Obstacles to licensing:• 24% of patenting firms are willing to but not able to license• Difficulty in finding licensing partners

The wider regulatory framework

Figures refer to claimed priorities.

Kyoto Protocol

What can patent offices (regulators) do?

1. Increase transparency, reduce complexity and cost s

2. Ensuring quality of granted patents

3. Improving efficiency

4. Steering applicant's behaviour

5. SME and University support

6. Harmonisation of IP systems

The eight main IPC and ECLA sections

A Human necessities

B Performing operations; transporting

C Chemistry; metallurgy

D Textiles; paper

E Fixed constructions

F Mechanical engineering; lighting; heating; weapons; blasting engines or pumps

G Physics

H Electricity

IPC: approx 70.000 codes; ECLA: approx 138.000 codes

Example 1: Increase transparency

New Classification Scheme:Example Wind Energy

Hierarchy level Description

Example 1: Increase transparency

EPO rated best patent office worldwide for quality for second year in a row

• Surveys by IAM magazine in 2010 and 2011• Target group: 700 in-house counsels and private practitioners

Percentage who feel that patent quality is very goo d/excellent:

In-housecounsels

Private practitioners

EPO 74% 62%

JPO 57% 43%

USPTO 50% 37%

KIPO (Korea) 34% 24%

SIPO (China) 23% 13%

In-housecounsels Private practitioners

EPO 71% 56%

JPO 55% 40%

USPTO 52% 38%

KIPO (Korea) 29% 21%

SIPO (China) 22% 20%

2011

2011 2010

18

Workshop: EPO Economic and Scientific Advisory Board'A high quality patent (a) satisfies the legal patentability requirements at a given patent office, (b) it has been granted, and (c) is likely to withstand invalidity proceedings in court or before an administrative body'

Improve patent quality:-prior art search and disclosure-abstracts/titles-non-patent literature-ownership re-assignments-translations-reporting of prior art by applicants (prior art repository)-opposition and re-examination-international harmonization and cooperation-code of conduct- ...

Example 2: Patent Quality

Potential conflicts between patents and standards

• Patent ambush (Dell, Rambus)• Refusal to license unrevealed patents (LG, Philips)• Failure to agree on FRAND (Qualcomm, Orange

Book)• Third party transfer without pass on of obligations

towards SDO (Nokia, Bosch)• Third party patents not in the standard (Microsoft, i4i)

Potential Remedies

• Early identification and disclosure of essential patents

• Identification of prior art documents coming out of the standardisation process (non-patent literature)

• Closer collaboration between POs and SDOs• Competition surveillance

• Patent pools

Patents and standards:

• 2003 EPO became ETSI member• 2007 EPO became observer at the Global Standards

Collaboration• 2009 MoUs with ETSI and IEEE• 2022 High level technical agreement with

International Telecommunication Union (ITU)• access to standardisation documents for prior art

search• regular exchange with the European Commission

Example 3: Increase transparency and efficiency

TRADITIONAL FEE STRUCTURE: ACCUMULATED CASH FLOWS OVER PATENT LIFE TIME

-€300

-€250

-€200

-€150

-€100

-€50

€0

€50

€100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Filing feesvs.

Initial costs

Search feesvs.

Search costs

Examination fees & internal

renewals

Internal renewal fees vs.

Exam, Opposition,Appeal costs

External renewal feesvs. Opposition and Appeal

costs

Externalrenewal

fees

millions

Final gap -excluding Patent Inf. costs etc.

Fees at EPO amount in EUR Filing (online) 115 European search 1165 International search 1875 Renewal for European application (3rd year) 445 Renewal for European application (10th year) 1495 Examination 1555 Opposition 745 Appeal 1240 Further processing (late payment) (50%) Further processing (other) 240 Claim fee (claim 16- 50) 225

Example 4: Steer applicants behaviour

Significance of small and medium sized enterprises (SMEs)

Knowledge about, use of IP protection

No. of SMEs

?Innocent

non-usersProfessional users

Policy

Example 5: Supporting SMEs and Universities

The unitary patent as a European patent

Europeanpatentapplication

Filing andformalitiesexamination

Search report with preliminaryopinion onpatentability

Grant ofEuropeanpatent

Refusal or withdrawal of application

Substantiveexamination

UNITARY PATENT

for the territories of the 25 participating states

At the request

of the patent proprietor

Limitation/revocation/oppositionproceedings

Appealproceedings

Same grant procedure as for classic European patent

The unitary patent replaces the individual effects of the European patent

in the 25 participating states

Example 6: Harmonisation

THANK YOU FOR YOUR ATTENTION

www.european-patent-office.orgNikolaus [email protected]

Patenting Activity across Different Continents (198 0-2009)(Selected mitigation technologies – Y02, by application authority)

Patenting in Africa by Inventor Country: 2000-2009(Patent applications registered at African patent o ffices, by country of the inventor)