As long as the quality of the examination process is not harmonized across major patent offices, and as long as their operational designs diverge, efforts to institute bilateral work-sharing and mutual-recognition agreements might actually drive global patent quality toward the lowest common denominator for intellectual-property rights. Prior to entering into mutual-recognition processes, patent offices should converge in terms of their operational designs, a process that requires the tackling of painful questions related to examiners’ incentives, education, training, and workloads.
In addition, post-grant opposition processes, intermediate requests for examination, and the degree to which patent applications can be adapted during the examination through CIP or divisional applications (meaning controlled adaptability), must also be similar.
In considering how an optimal convergence should occur, one must keep in mind that although Europe performs better in terms of quality, it does little in terms of accessibility or affordability for young, innovative companies, universities, and scientists. Several components of a patent system’s operational design exist to provide easier access to the system, including sharp fee reductions for SMEs and grace periods. These details do not improve the degree of quality in a patent system, but they might ensure that those for whom the patent system was originally created can make use of it.
A patent is viewed as a “probabilistic” property right that gives the patent holder the right to sue potential infringers, and a fair chance to either win through patent litigation in court, or reach a favorable agreement. Therefore, a higher quality in patent examination lowers the transaction costs associated with enforcement of intellectual-property rights, and increases the demand for patents as part of an IP strategy. The quality of the patent system contributes to the credibility of the patent certification process, and hence to the private value of, and demand for, patents by firms.
Indeed, a higher-quality patent system implies a more rigorous selection of the inventions submitted by firms, and a better enforcement of granted patents in the judicial system. Whereas the latter effect is good for all innovators, the former effect is bad for the innovators with “small” inventions, and reduces their incentives to apply for a patent.
This is wittingly infused in the cleverly-constructed paper by David Musker entitled, “The great free beer debate or, what ales the patent system?” Hilarious in its mimicking of the EPO’s efforts to deal with software inventions through a beer analogy, it is recommended reading for its humor and resonance with real issues. A credit to his creativity, Musker assembles a bevy of terms and correlations in an an entertaining escapade into IP strategy such as: CAMRA (Campaign for Real Ale), Free Beer movement started by microbrewer Robert Staleman’s beer LNG (LNG’s Not Guinness) against the monopoly power of Micro-org and International Brewing Machines, alcopops, “beer as such,” stupefaction, Stupefying Effect Test, Open Sauce movement, and GUINNUX.
Thomas Jefferson (1794) penned perhaps one of the best-known maxims: “Patents should draw a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not. Patents are, after all, government-enforced monopolies and so there should be some ‘embarrassment’ (and hesitation) in granting them.” This illustrates the importance of deploying a rigorous examination process to ensure a sound patent policy for intellectual-property rights.
An opposing view was advocated through a “rational ignorance” argument, whereby patent offices should not devote too many resources to examination, because only a few patents are worthy of those resources, and these can be properly assessed in patent litigation proceedings. van Pottelsberghe’s findings suggest that the EPO is closer to Jefferson’s perspective, whereas the USPTO is closer to the rational-ignorance pathway. However, it is still unclear whether it is Europe or the US that needs to rethink its position on the quality ladder.
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Primary Bibliographic Sources
- Nicolas van Zeebroeck and Bruno van Pottelsberghe de la Potterie, “Filing Strategies and Patent Value,” Economics of Innovation and New Technology, (2011).
- Bruno van Pottelsberghe de la Potterie and Pierre M. Picard, “Patent Office Governance and Patent System Quality,” Working Papers ECARES, (2011).
- Bruno van Pottelsberghe de la Potterie and Matthis de Saint-Georges, “A Quality Index for Patent Systems,” Working Papers ECARES, (2011).
- Bruno van Pottelsberghe de la Potterie, “The Quality Factor in Patent Systems,” Industrial and Corporate Change, (2011).
- R. Polk Wagner and Gideon Parchomovsky, “Patent Portfolios,” U. Pa. Law Review, (2005).
- Carl Shapiro, “Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting,” NBER Working Paper, (2003).
- David Musker, “The great free beer debate or, what ales the patent system?” Journal of Intellectual Property Law & Practice, (2007).
