Online Enforcement Index Aims To Aid Patent Filing Decisions

Part of the decision whether to file a patent in a particular country rests on how likely it is the patent can be effectively enforced, but until recently the information needed to answer that question was mostly anecdotal, Nikolaos Papageorgiadis, University of Liverpool Management School (UK) international business lecturer, said at a  webinar. To remedy that, he and Cranfield School of Management  Economic Policy, Sustainability and Performance Reader Konstantinos Alexiou created the Index Of Patent Systems Strength, which ranks the effectiveness and efficiency of the patent systems of 49 countries.

The index is here. The 16 November webinar was held by OxFirst.

After reviewing 40 different intellectual property protection/enforcement indices, the academics decided to develop a new one, Papageorgiadis said. They considered three elements for measuring the strength of patent systems: The legal framework, the operations which enforce patent rights in practice, and the efficient governance of public and private organisations related to the policy and operations of the system. They focused on the latter two elements, looking at  transaction costs (for servicing, property rights protection and monitoring) and components of the patent system in each country, such as the quality of patent administration, level of corruption in the judiciary, and cultural attitudes toward buying infringing goods.

The index measures the effectiveness of the 49 patent systems from 1998-2015. The 2014/2015 data shows that Denmark topped the list of “very strong” protections and enforcement, followed by New Zealand. The UK headed the grouping of “strong” countries, followed by Iceland. The US, also a “strong” system, came 20^th overall. The US ranking is the result of its high patent litigation activity, which can make it difficult to enforce rights, Papageorgiadis said at the webinar.

He received “some informal feedback from a couple of policy makers who would have expected (or wanted) that the US would score higher than e.g. Canada,” Papageorgiadis emailed later. He said he explained to them that he followed an established Organisation for Economic Co-operation and Development methodology that was scrutinised and verified through peer review. That methodology is “fully transparent” and anyone can replicate the index, he told Intellectual Property Watch.

The list of “moderate” countries was lead by Israel, followed by Portugal.  In the “weak” category were the Czech Republic and Jordan, among others; the “very weak” category included India, China and Russia. Venezuela came last in patent protections and enforcement.

The lower rankings don’t mean that it’s impossible to enforce patent rights, but that there are high transaction costs, Papageorgiadis said. The index map isn’t meant to discourage patent filings in particular countries and encourage them in others, but has different messages for different firms, he said. A small UK company might decide not to file patents in Brazil, say, because enforcing them would be too difficult, and to focus instead on countries with stronger protections, he said. Enforcement is merely one element of a patent rights decision, he stressed.

In a November 2015 study on patent systems strength and patent applications, Papageorgiadis found that in countries with effective, strong patent enforcement rights and low transaction costs, there are large numbers of applications. More unexpected, he said, was the finding that in countries with weak enforcement processes there are still high levels of patent applications.

Where there are moderate-to-weak patent systems, however, the number of patent applications is low, he said.  Firms might be avoiding filing patents in such countries because their patents systems are the most uncertain ones, Papageorgiadis told Intellectual Property Watch. “Strong or very weak patent systems give clear messages” about how much effort and cost is required and how companies should manage their patent portfolios and other intangible assets, but moderate or weak systems can be perceived as unpredictable, he said.