A report prepared for the UK IP Office predicts an increase in average patent pendency (patent backlog) of 13 months the coming years. This will result in costs of 7.6 billion £ every year. The worldwide patent is not only annoying to the applicants it is also costing us money…and lots of them.
The report lists the drivers of patent backlogs as:
· increasing number of applications
· size and the complexity of patent applications due to a combination of: growing technical complexity; patents from emerging sectors (such as biotechnology and computer science); “export” of different drafting styles
· patent strategies involving applying for large, unfocused patents (e.g. a firm identifies a broad set of potential inventions, files a very broad patent immediately, delays examination for as long as possible, then as its research progresses extracts the most relevant elements into a divisional filing at a later date)
· applicants’ preference for lengthy pendency times (evidenced by a positive correlation between pendency and a measure of applicants’ private knowledge of the quality of their applications) - a pending application is better than no patent at all and the longer the application is outstanding the more uncertainty for competitors and the more possibility of obtaining financing, and licensing based on the invention
· patent offices’ incentives structure may also contribute to backlogs if it does not sufficiently discourage strategic delay of substantive examination
The costs are calculated by estimating
· Reduction of patent value due to pendency – a patents value is only realized when granted
· Reduction of incentives to innovate – and yes some see protection as an incentive
· Reduction in patent quality – as patent offices are under pressure to grant the increasing number of pending patents
· Increased uncertainty over the scope of patents
The good news is that the problem is easily solvable…
The study estimates that a third of the pending applications are duplicates. If a mutual recognition system were to be implemented that allowed offices to spend less time on duplicates already processed by other PTO´s the backlog would be reduced by 9 months. And if a system of full mutual recognition were implemented the reduction in pendency would be 37 months!!
So its a clear message to politicians and patent offices around the globe: get on with the work sharing and prosecution highways and save us all some money. The UK and US PTO´s are already doing something.
Increasing Patent Backlogs are Costing 7.6 bn £ a year
Hong Kong initiative supports IP strategy and financing
Managing IP has an interesting bit about a Hong Kong initiative called Intellectual Capital Management (ICM). The initiative is a consultancy service jointly launched by the Innovation and Technology Commission and the Trade and Industry Department, targeting small and medium enterprises. The Program will provide an ICM consultant who will visit your company twice and:
· help you to become aware of your intellectual assets
· help you to identify and mitigate risks relating to those assets
· assist you to make plans for exploiting your assets in a more disciplined manner, and
· assist you to create an Intellectual Capital Report for your organisation
The intellectual Capital Report is an interesting initiative because it involves assessing your IP, putting a value on your IP and defining risks.
The valuation is purely qualitative and not involving economic values, but nevertheless a good start. The second part actually is also quite interesting since it puts a face on the consequences on the risks associated to your IP. For the last three years I have worked with implementing risk based planning in the Danish public sector and know what benefits such an approach have. Adding the risk factors is an easy and very visible contribution to your prioritization. If for example the greatest risk is losing the knowledge of your employees your IP strategy should tackle that problem by implementing processes codifying that knowledge and protecting it – fx by patents.
The benefit of the project is that a number of Hong Kong banks are participating and are offering more favourable financial services (loans and such) to businesses using the ICM programme. So not only do you get valuable insight in your company’s IP you also get financial benefits.
New Presentation
Yesterday i did a presentation for a group of people involved in advising Danish growth and entrepreneur companies. It was a very inspiring crowd and I gained some insights in the problems facing growth companies.
I put my slides (in Danish) on slideshare and they are available here.
Apple’s strategy of stealing
Via a Danish newspaper I came across a videoclip from 1996 where Steve Jobs is saying that Apple shamelessly steals from others. When Jobs say “steal” I don’t think that it is in the “illegal appropriating IP” kind of stealing he means. He talks about that Macintosh was successful because of the different backgrounds of the creators. My guess is that he means “being inspired”, although the user interface was very much “inspired” by work done by Xerox Parc.
Thinking about the rebirth of Apple (Ipod, Imac, Ipad) it actually makes sense. What Apple did was to get a bunch of media people and Ad agency people together over a caffe latte and let them steal from their world and use it in the computer design. And viola a caffe latte inspired pc!
New President of EPO
The votes are in…Benoît Battistelli of France is the new President of the EPO. The IP:JUR blog has more coverage.
Penny Arcade on piracy
I love Penny Arcade both for the art and the humor.
The other day they did a really funny cartoon on piracy and with a nice layout too.
ACTA openness
Via the DKPTO blog I found this invitation to a stakeholder meeting about the ACTA treaty. The goal of the meeting is to
1) Inform stakeholders about the ACTA goals and the negotiation process so far;
2) Receive comments from stakeholders about their views (expectations or concerns) regarding ACTA.
So the openness is beginning (?)
See more about EU and ACTA here.
Pnumatic subway
Wired has a facinating story about New Yorks first attempt to build a subway in 1870 - 40 years before the real one came. What was special about this one is that the train cars was driven by air pressure. Think mail delivery tube systems. The project failed due to concerns about building safety, but the story is amazing. Read more about it here and see amazing pictures.
Inventors doesn´t need patents, they just need a market
I have been pondering over a blogpost about venture capitalists attitude towards IP/patents for a few days. On tech dirt there is a post claiming that many venture capitalists are seeing patents as blocking investments opposed to encouraging them. The author says “It comes back to the same point that we’ve been making for years: truly inventive people don’t need a patent as incentive to invent: they just need a need in the marketplace and they go and create.”
In my opinion there is a contradiction here. You cannot have a market without ideas, and the only thing protecting an idea is either secrecy or IP. True IP is an artificial creation mimicking physical property, but it is a creation which in my opinion is founded in basic property rights – fruits of your labour - philosophical stuff.
This leads to the next problem in the blogpost. In the post (and the post by Brad Burnham which it quotes) there is talk of patents blocking similar solutions. It is a common mistake to make, when you say that a patent blocks similar solutions to a problem. The fact is that it is the other way around. You are given a patent to a specific solution, leaving alternatives free to competition. I will, however, acknowledge a major problem here. In the US there is too broad patents and too little distance between the patents. This leads to the problems described in the post where frustrations with late emerging patents are very bothersome.
In Brad Burnhams post he doubt that companies like Google and ebay support patent protection. I think that with their 2500+ and 660+ patents both companies hope to benefit from patent protection.
Learning from animals when inventing
Today I read an article in one of my favorite papers – International Herald Tribune – about gecko tape. Gecko tape is inspired by… the gecko. And in the future will give us the possibility of sticking something to a surface and remove it again and again.
It’s amazing to read the description of how the geckos physique inspired the invention. As the article describes the technology is being protected by the inventors. Mark Cutkosky has a patent and his colleague Kellar Autum has several in the field.
I found a bunch of other articles describing how inventors were inspired by animals. Examples of this inspiration are:
· Swimsuits – inspired by shark skin
· Velcro – inspired by plant burrs
· Building ventilation – inspired by termite mounds
IP in Danish ethanol technology
Danish newspaper Børsen has an article today describing how a Danish energy company – Inbicon – has sold the rights to use the company’s technology in Asia to Japanese company Mitsui Engineering & Shipbuilding.
Inbicon has developed technologies converting biomass to ethanol, and has a number of patents protecting their inventions. These patents will serve as the foundation for a steady royalty stream for the company, and is a good example of how patents can be used for profit.
Troll tactics against the trolls
When reading IP law & Business´s story about RTX I had to reread it and draw myself a picture.
What is described in the article is a countermeasure against patent trolls (NPE) using troll tactics. Actually its brilliant when you get the concept.
RTX is a company that acquire patents but does not produce anything itself…the markings of the patent troll. However RTX does not litigate the acquired patents but instead offers a subscription to all patents in its portfolio for defensive purposes. So when a subscriber is attacked by a patent troll he has an immense backlog of trolling patents. RTX identifies potential trolls and patents threatening their subscribers and purchase those patents (or the rights to the patents), whic creates a kind of pre-emptive dynamic.
There is also an economic incentive in this deal. Subscription costs 4,9 mill $ a year, which is to be balanced against costs involving lawsuits. For the larger companies this is probably a bargain. The subscription does not eliminate the risk of attacks from trolls but will make them think twice.
All in all an interesting concept.
SCP (Slow Commitee on Patents) meeting
The DKPTO reports on their blog from the recent SCP meeting where the agenda (third year in a row apparently) was the future working program.
One of the hot topics is Exclusions and Limitations to Patentability where a study is under way. Brazil however decided to jump the gun and have submitted their own proposal on the subject. Its a quite messy paper suggesting the establishment of a project mapping national exclusions and experiences with these exclusions. This is exactly one of the reasons why the international IP policy work is increasingly bi-lateral. Nothing gets done in the larger organizations. Everything takes years and years, everybody has their own agenda and the results are non-binding and in a distant future. Therefore it makes sense to continue developing IP policy and law with countries you have something in common with, as e.g. is done in the B+ group.
One interesting document on the SCP list however is a paper on standards and patents. Seems like a good read.
Patent Trolls are the good guys…seriously!
Businessweek has a special report on “Patent Trolls” one of the favourite topics of patent critics. In the article Ron Epstein explains how the Patent troll or Non Practicing Entity can be a good thing.
One of the good things about the NPE is that they can act as a gatekeeper for smaller inventors pooling patents taking up the fight with larger companies. The NPE´s will either be an innovator who failed to market their innovation or a patent investor trying to turn patents to profit.
On the surface Epsteins arguments are nice enough, but in my opinion many incidents involving the NPE´s tell a slightly different story. Many of the NPE´s historically invest in very flimsy patents and fire broadsides of lawsuits and infringement letters. This has helped build the reputation of the business. And I think it’s legitimate to question how much value they add generally speaking. Epstein claim that the NPE´s are representatives of the individual inventor. Looking at R&D investment statistics and patents granted to organisations it is clear that the majority of innovation is not carried out by the lone inventor.
So all in all im not convinced that the patent trolls or NPE´s are the good guys all the way.
Still no new EPO President
The DKPTO reports that it has not been possible for the Administrative Council of the EPO to reach an agreement of who is to be the new President. They will try again in march.
Danish utility models 2009
While we are waiting for the 2009 statistics for Danish utility models I decided to take a look at some of the applications from the last part of 2009. I found 3 funny examples of utility models which would not fit in the patent system.
Transportation box for comfortable transport of cats or dogs
A table mounted on a siccor like device [as seen in cartoons, my comment]
Walking strip – a rope for you to whold when you do not dare hold hands while walking. probably the result of the swine flu fear. I doubt this will see the great commercial breakthru.
Danish Piracy Board Starts Its Work
Computerworld has an article on the newly established piracy board. The purpose of the board is to formulate concrete solutions to problems with piracy. Participants are stakeholders from around the copyright organisations.
One of the board members from the Danish Consumer Council is worried that rightholders will try and tighten control and argue for a stricter legislation. He is worried that consumer rights will be trampled by a dying business model.
Thinking about the last part…the dying business model I came to that conclusion that the copyright business model is not dying…it is alive and unwell. Since the dawn of the Internet the death of copyright and associated business models have been spelled out…but the old business is still alive. Music companies still sell music, and books are being sold too. It took a while to go digital but that transformation is done. The difference between Itunes and ordinary CD´s is not that great. In both cases the customer buys a product and must respect certain rules. So the business model is doing well, besides from the widespread piracy.
I look forward to seeing the results of the Piracy board. My fear is that the recommendations will be general and unfit to do anything real about piracy. The reason is that rightholders will most likely work towards rules giving them more power to fight piracy, The IT and telecommunication stakeholders will not accept any changes giving them a gatekeeper role and the consumers will fight any threats to consumer rights. Everybody will defend their business model.
Sorry for the lack of updates
The last few weeks have been quite hectic, since i changed jobs, so I havent ahd time to update as regularly as I would have liked. But now I´m back on track.
Quality over Quantity in US patents
Business week together with Ocean Tomo have analyzed which of the 1000 biggest companies (by revenue) has the most valuable patent portfolio. The result supports the theory that it’s not the size of the portfolio that matters but the quality of the patents granted.
IBM is the world’s most patent active company with 4914 patents granted in 2009.
The top 10 most active companies are: (1) IBM (US) - 4,914
(2) Samsung Electronics Co. Ltd. (KR) - 3,611
(3) Microsoft (US) - 2,906
(4) Canon KK (JP) - 2,206
(5) Panasonic Corp. (JP) - 1,829
(6) Toshiba Corp. (JP) - 1,696
(7) Sony Corp. (JP) - 1,680
(8) Intel Corp. (US) - 1,537
(9) Seiko Epson Corp. (JP) - 1,330
(10) Hewlett-Packard (US) - 1,273
However the study made by Ocean Tomo shows a different story. They used patenting trends, citing statistics and litigation rates to calculate the value. The result is a widely different picture where Microsoft is on the top of the heap and Rioch and Hitatchii moves into the top 10 from lower spots.
(1) MICROSOFT - Patent value: 185,004
(2) SAMSUNG - Patent value: 128,727
(3) CANON - Patent value: 109,650
(4) HEWLETT-PACKARD - Patent value: 101,502
(5) INTEL - Patent value: 96,610
(6) HITACHI - Patent value: 70,450
(7) RICOH - Patent value: 57,501
(8) IBM - Patent value: 57,414
(9) PANASONIC - Patent value: 51,577
(10) SEIKO EPSON - Patent value: 49,573
The numbers show that Microsoft and Samsung not only take out a lot of patents, they also take out the right patents. This would indicate that IBM could save a lot of money on patent applications if they were more conservative in their approach. Ocean Tomo points to the large number of service patents as one of the things feeding the heap of IBM patents.
I´m on print
The first batch of articles in 2010 from Danish Law Journal “Ugeskrift for Retsvæsen” includes an article by yours truly. I’m very proud that my article on re-establishment of rights in the patent system got accepted. The article covers the Danish case law in the re-establishment area collecting experience from both administrative decisions and the courts. The title of the article is “Reddet på Målstregen - genoprettelsesinstituttet i dansk patentret” and has number U.2010.B.17.
The editor of the journal Mads Bryde Andersen gave many good comments on my article, which I appreciate a great deal. The article actually is a shorter version of an earlier (unpublished) comparative article on the Danish and EPO practice. If you are interested (and read Danish) I still have the longer article lying around somewhere. 
Insight in a patent jurors mind
Some time ago I wrote about the i4i vs. Microsoft patent infringement case. MS has recently lost the case.
Business has struck gold with their interviews with 3 jurors in the i4i vs. Microsoft patent infringement case in Texas. They ask 3 of 8 jurors on the case why they found MS guilty of patent infringement.
The look into the mind of the deciding persons is very interesting, but also a bit scary.
One juror talks about MS not being believable and that they knew that i4i had the XML-software and went on to create their own version. This actually is not a problem if they use another method to achieve the same goal.
A second juror tells that since i4i´s founder testified and Bill Gates didn´t MS did not sound believable. And thats scary stuff. Instead of looking at the facts he is annoyed that Bill Gates does not show up. And why should he? He probably haven’t got much insight in the matter and would just be a puppet reading the prepared speech. And if he should go to all court cases involving MS his calendar would be stuffed with court dates. This juror also says that the i4i lawyer came off more “genuine”…so acting is a new skill at law school I guess.
The case is being appealed is the i4i vs. Microsoft battle is not over yet. Nevertheless MS has been preparing to remove the contested feature from MS Word.
In the last batch of decisions from the EPO Board of Appeal from 2009 there is an interesting decision regarding non patentable subject-matter (T 0509/07 - 3.5.04). The decision takes on the subjects of non-technical problems and problem-solution approach.
Non-technical subject-matter
The problem solved by the invention claimed in the patent application is “at least one problem associated with the playback of a sequence of images with perceptible differences there between, is that the motion and/or flicker and flashing created by the transitions between images can be quite annoying, if not distracting”. The BoA is not impressed by this and states that this problem is non-technical since “watching the playback of a sequence of images with perceptible differences is considered annoying or entertaining is primarily a subjective assessment of a human observer.” Furthermore no technical features are mentioned in claim 1 and the method does not necessarily solve the problem described. Ouch!
Problem solution approach
Using the Problem-solution approach the BoA disintegrates the application. During this analysis the phrase “well known” is used a lot. The BoA concludes after a very well documented journey thrugh the prior art as a person skilled in the art, that the solution is straight forward.
A very nicely argued decision.
EPO Helping With the Climate Change Agenda
In the COP 15 meeting that took place in Copenhagen there was one very interesting meeting that didn´t make the headlines. The European Patent Office and the UN Environment Programme and International Centre for Trade and Sustainable Development (ICTSD), presented the first findings of a joint project on “Patents and Clean Energy: Bridging the gap between evidence and policy”.
The idea is to map climate friendly technologies to see if anything can be learned from this (trends, ownership, technology transfer etc.). The EPO has published its slides from the meeting in Copenhagen. In the slides the initial findings are presented:
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There is increased patent activity in climate friendly technologies compared to fossil fuel technologies. The increase takes place after the Kyoto agreement, showing that such agreements have a profound effect not only on governments but also in research and business.
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Developed countries dominate the field
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Geothermal technologies is the least developed field.
Later in 2010 the EPO and its allies will publish further results which I look forward to. It seems that this approach is an important one when it comes to defining the trends, working out technology transfer agreements (as the developing countries are crying out for) and also in public research policy. If a field is left underdeveloped by business, but play an important role in the combat against climate change, it is possible for governments to support these areas.
It would be interesting to make a more detailed country study focusing on where the technologies are developed (inventor location). 
I got the heads up for this post from AG-IP
Piracy a nessecary evil?
On CNN Tech there is a nice piece on e-book piracy. The e-book version of the new Dan Brown bestseller out sold the paper version the first few weeks and together with emerging reader devices as Kindle it heralds the breakthrough of the e-book. Along with success comes piracy. The same Dan Brown bestseller was to be found in pirated form only 24 hours from the launch of the e-book.
The article continues to investigate the piracy fear held by both authors and publishers, one person citing the “open source culture of the Internet” as a threat. This is of course a misunderstanding since open source has nothing to do with piracy. What is meant that when things can be found online people expect it to be free (as in no payment). Nevertheless it´s interesting how open source is being dragged into the piracy debate…not a good thing if you consider branding of the concept.
In the end of the article the piracy problem are put in perspective by statistics showing that people buying e-books are 3 times more likely to buy books that other people (this is the same in the music area). Therefore the e-books may generate more revenue after all, and piracy is a nessecary evil. This however does not remove the problem that 100.000 people downloaded the new Dan Brown book without him getting any money.
The response of the publishers and authors is to improve the technology (ie. DRM) which has created much controversy in the music business. The likely move will be to tie each book to a specific reader and have the reader go online to check if the content is legal. This of course (and rightly) will generate protests from consumers who under copyright law have permission to lend and sell their copy to others.
Danish Design Company Receive 14 IF-Awards
Danish design company Bodum cleared the shelves at the German IF-Awards. The company got 14 awards at the 2010 award show. It´s a remarkable feat and I´m surprised that I had to go to Core 77 to find out. Not even the Bodum homepage has any mention of the awards – does that mean that the Core 77 story is a mistake?
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