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The paradox in US patent filing

James Nurton

Our February issue included a fascinating article on patent filing trends in the US, based on statistics compiled by IFI Claims using last year’s USPTO figures: it lists the biggest filers, fastest growing filers, most active law firms and who represents whom. But dig down into the data and there’s some even more interesting trends

I spoke with Mike Baycroft of IFI Claims about the data last week and in particular about some analysis he has done of pre-grant trends. Analysis of published pre-grant applications is inevitably more speculative, as many applications will be dropped or rejected by the Office, but it is suggestive. Baycroft calls it “early warning” data.

Managing IP Feb 2013The granted patent information shows two clear trends: the growth of electronics, computing and telecommunications led by companies such as Google (up 170% year-on-year), Apple and Alcatel-Lucent and the strength of Asian applicants. Looking ahead, these two trends are set to continue, with IBM, Samsung and Canon top of the published pre-grant numbers. But there will be changes: for example Baycroft points out that Apple and RIM are set to rise based on the pre-grant figures, despite the recent setbacks of the former and the well-publicised financial problems of the latter. He also notes the growth of overseas universities, such as Korea’s ETRI, which has taken off in filings in the past few years, partly thanks to government encouragement.

But while the high-tech companies continue to soar up the patent rankings, many of the traditionally strong filers in the consumer products and chemicals sectors such as 3M, BASF, Procter & Gamble, Bayer and DuPont dropped out of the top 50 altogether last year. So does this mean there is, in the US at least, a two-speed patent system?

On the one hand, there are the more mature industries where research is often outsourced (consider P&G’s Connect + Develop programme or DuPont’s stated preference for open innovation) or where, as in life sciences, a lot of innovation takes place in small companies or research institutes before it is licensed to big biopharma companies. In these industries, patents are probably filed quite selectively and by many different parties.

On the other hand are the booming software and smartphone industries, where patents are being filed in their thousands, many of them by a handful of big players. Many are also, judging by anecdotal evidence, taking advantage of the new USPTO fast track. Even those within these industries would probably accept that many of these patents will turn out to be junk, or of dubious validity at best. But filing patents creates an arsenal which is valuable in litigation and negotiations, impresses investors and can also be a convenient way of establishing prior art.

As the US implements the AIA and considers the further reforms proposed in the SHIELD Act, the challenge is to ensure that the patent system remains appropriate for both these business models.


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