12th mar, 2010

Increasing Patent Backlogs are Costing 7.6 bn £ a year

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.

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