Authors Look At Positive Impact Of Patents On Public Domain

A study emphasising the positive effect of the patent system on the public domain was presented this week by two of its co-authors as a side event to the World Intellectual Property Organization committee on development.

Patents have been important contributors to the public domain, the authors assert, feeding inventions to the public domain after the protection period. Meanwhile, non-practicing entities, sometimes called patent trolls, do not seem to have reduced the rate at which owners are contributing their patents to the public domain, they also found.

The study [pdf], entitled Patents and the Public Domain (II), was presented alongside this week’s meeting of the WIPO Committee on Development and Intellectual Property (CDIP), taking place from 18-21 November, and was also presented to the CDIP plenary session on 20 November. It follows a first study [pdf] on the same subject, which had been presented during the 4^th session of the CDIP, in November 2009.

The perception of the public domain is often that it results from the expiry of patents, when after 20 years the invention falls into the public domain, but some information on the patent is accessible prior to that date, said co-author Neil Wilkof, of Eyal Bressler & Co. in Ramat Gan, Israël.

The study is divided into three parts, he said.

Part I focusses on scope of the public domain, part II examines non-practicing entities (additionally called patent assertion entities) and part III deals with the patent management and its potential impact on the public domain. The analysis carried out in the study looks at time and geographical factors, as well as commercial factors and other goals of various actors, Wilkof said.

Up to 95 percent of all patent applications have potentially fed the richness of the public domain, he said, adding that the growing rate of patenting across the globe is feeding this public body.

If the patent system usually grants a patent term of 20 years to the patent holder, not every rights holder maintains the validity of its patents for the whole period, he said. This is brought on by several reasons, such as the patents being challenged, or cancelled. In the United States, he said, some 99 percent of patents are never enforced.

Territoriality of Patents Advantage to Developing Countries

Patents are generally filed in a restricted number of countries, he said. Other countries in which the patents have not been filed can benefit from the information publicly available in patent applications, he said.

Developing countries could then take advantage of this fact, he said. Entities “can use the invention competitively in their own markets and those with no corresponding patent protection,” the study said. “Further, through such exploitation, these entities can gain a competitive advantage in developing improvements to the invention, which then can be the basis for seeking future proprietary patent rights in ANY country. This situation is the basis for a global arbitrage on invention information disclosed in patent publications.”

“That is the greatest gift and contribution that the patent system can bring,” he said.

Developing countries and civil society have argued that developing countries often do not have the ability to make use of information contained in patent applications. Technology transfer requires the transfer of know-how as well as technologies, they say.

Non-Practicing Entities (NPEs)

The study also explored non-practicing entities, he said, arguing that the practice of acquiring patents without practicing the invention is not a new phenomenon and was cited in a Michigan Supreme Court ruling of 1878.

NPEs seek revenues from the patents they acquire by licensing the rights or through litigation, he said. The study describes six categories of non-practicing entities, he said: patent assertion entities, patent aggregators, patent intermediaries, universities and research institutions, individuals, and non-competing entities, which are companies asserting patents outside their area of products or services, he said.

“Some NPEs, like universities, exist to grow and feed the public domain of useful human knowledge,” according to the study, which gave a general evaluation of the contribution of NPEs to the richness of the public domain. It found that basic research organisations were highest on the scale, and patent assertion entities, lowest.

The study was co-authored by: Prof. James Conley, clinical professor of technology at the Kellogg Center for Research in Technology and Innovation, at the Kellogg School of Management, Northwestern University, Illinois (United States); Peter Bican, doctoral candidate at the chair of Technology and Innovation Management, WHU Otto Beisheim School of Management, Vallendar (Germany); and Neil Wilkof.