We copycat IPKat*:
An interesting study by Brent Allred and Walter Park, “Patent rights and innovative activity: Evidence from national and firm-level data", published in the Journal of International Business Studies 38(6): 878-900, is one of those economist studies that shed some interesting light on the relationship between patents and innovation, a much underexplored area in Europe.
read Roger Smeets’ summary of the study. Roger is a PhD student at the Nijmegen Centre for Economics (Radboud University Nijmegen, Netherlands).
Yesterday, December 13, 2007 the revised European Patent Convention (“EPC2000”) came into effect. It simplifies the patent application procedure before the EPO by eliminating unnecessary requirements and generalizes the BEST system (Bringing Search and Examination Together). It further makes the EPC itself more adaptable by transferring detailed provisions of a procedural or administrative character to the Implementing Regulations.
Changes for users
A radical change? No not quite but a considerable one. The new “refinements” of the EPC reflect the demands of the users of the system, the inventors and scientists that ensure continued progress through their work. Patent applications can now be filed in any language, though subsequently (within 2 months) a translation has to be submitted in English, French or German. Moreover, all EPC contracting states are now automatically designated when filing a European patent.
A useful new feature is that patentees also have the right to limit their patent." A new feature is the limitation procedure, which lets proprietors restrict the scope of their patents in central proceedings before the EPO and with effect for all the contracting states.
It will be interesting to see:
* A new limitation and revocation procedure will be introduced. This will provide a way for the owner of a European patent to limit the claims at any time after grant. The question remains what degree of scrutiny will be given to amendments sought under the central limitation (amendment) procedure and how speedily applications for central limitation will be dealt with. We expect amendments to be handled simply, and relatively quickly, at least at the outset
* what consequences will arise when a national court has found infringement but the European patent is subsequently limited (amended) in scope following the new centralized procedure. Such an amendment will be deemed to have taken effect from the date of the grant of the patent. In the UK at least, an injunction granted may be discharged but any award of damages would stand
* the extent to which a consistent approach to post-grant amendment in national proceedings will be achieved in all contracting states. For example, in the UK, the Comptroller / Court will enjoy only an extremely limited discretion to refuse amendments in light of the amended UK requirement that they should "have regard" to any relevant principles applicable under the EPC
* whether second medical use claims drafted in the new form will be construed by the EPO and national courts as having the same scope as the old 'Swiss form' claims. In particular, direct infringement will take place in the country of use, not the country of manufacture;
* how, when construing a patent claim, national courts will interpret the requirement that they must take "due account" of so-called 'equivalents' to elements specified in the claim. The Dutch and German courts, for example, already apply a doctrine of equivalents. The likelihood is that the English Court will not change its current practice at all. The English Court asks the question "what would the skilled person understand the patentee to mean by using the words of the claims". This may or may not result in a broad construction - all depends upon the invention and its context.
Not later than the nineteenth century patenting of the automobile by Rochester patent attorney George Selden paper patents and marginally developed patents have been obtained for the principal purpose of suing major manufacturers. Whether good or bad, providing a nasty buzz word to describe such activities in a generalized fashion merely inflames the rhetoric.
Thus was born the term “patent troll” to widely define the enforcement of patents by those who do not themselves manufacture and sell products. The originator of this nomenclature has now switched to the dark side and, not surprisingly, says that he “refrain[s] from using [the term “patent troll”] today. It has become too emotionally charged and too often hurled carelessly as an epithet to disparage just about every kind of plaintiff in a patent suit.” See Peter N. Detkin, "Leveling the Patent Playing Field", 6 The John Marshall Review of Intellectual Property law 636, 642 (2007). (*)
Prof. Hal Wegner, December 8, 2007
IPEG's comment:
I have used the term patent troll many times in my blogs (just type in the word “troll” in the search column above and you will see all the previous posts).
That Peter Detkin is trying to refrain from using the term is quite understandable, as he is managing director of Intellectual Ventures, seen by many as a patent troll in optima forma. Intellectual Ventures likes to see themselves as “a combination of a private-equity fund and an innovation hothouse”. So says Nathan Myhrvold, IV’s creator. The Wall Street Journal wonders: “will the company begin launching patent-infringement lawsuits to pressure companies to pay for use of its IP?” Myhrvold says that his firm hasn’t sued anybody for patent infringement but that he can’t rule it out in the future.
And that is exactly what a patent troll does. That it has obtained a negative connotation can hardly be a surprise. Amassing patents with the sole purpose to assert them against industries and users of patented technology by forcing them either by carrot or stick licensing into paying money, has nothing to do with “innovation”.
The relation between patents and innovation is still an area of heated policy debates and theoretical controversies, and empirical studies of the consequences of patenting for innovative activity are scant. Most economic studies and seem to concentrate on the effects of patenting for innovative strength of developing and developed countries (**). One of the most recent studies - and one worth reading(***) - comes to the conclusion that the effects on innovation of patenting is far less in developing countries than it is in developed countries. However there is still a lot of unknowns what the effect is of patenting on innovation between competing undustries.
It’s a far cry from the truth to claim that amassing patents in an organization that in itself does not produce any innovative products, improves working methods or produces any other economically relevant progress, is contributing to “innovation”.
(*) See Hal Wegner on “Who is the Original “Patent Troll”?”
(**) see: Nagesh Kumar, “Intellectual Property Rights, Technology and Economic Development: Experiences of Asian Countries”, Research and Information System for Developing Countries, New Delhi, India.
(***) by Brent B Allred and Walter G Park (“Patent rights and innovative activity: evidence from national and firm-level data”, Journal of International Business Studies (2007) 38, 878–900)
Associated Press reported this week about Macrovision's (MVSN) acquisition of Gemstar. MVSN CEO Fred Amoroso commented:
"There is a transformation of home entertainment going on and we want to give consumers the ability to find in and easily across a variety of devices"
Actually the leap of logic required to understand that statement has to do with the fact that MVSN has been steadily acquiring IP and treating it more strategically. Wall Street is valuing the transaction based on Gemstar’s existing revenue streams, a big part of which is the TV Guide magazine, which is a printed weekly magazine of TV listings in the US that has been around forever. Macrovision has utterly no idea what to do with this business, as even its CEO admitted during the analyst call for the acquisition, and it is considered – even by magazine publishing industry standards -- a dying business that has not adapted to the times.
CEO Fred Amoroso didn't provide any definitive answers in a conference call with analysts, saying he didn't know much about publishing and needed more time to assess how TV Guide could fit into his strategy. Fred doesn’t know anything about publishing – his background is accounting/consulting. This is why the stock tanked. It’s a visceral reaction to the long legacy of TV Guide.
More importantly, Gemstar has and EPG (electronic program guide) business – technology and IPRs (patents). Because of Gemstar's declining TV Guide business, their potential as a "patent troll", holding many patents on (e.g) EPG (electronic programming guides) makes it a powerful player in the IPR market.
We are betting that MVSN is preparing to launch a series of very aggressive patent assertion moves both in the US as well as in Europe. This is not something that it can bake into its revenue projections for Wall Street, nor is this the kind of thing that the typical Wall Street analyst understands how to include in his “turn the crank” formula for valuing acquisitions. Ergo, Wall Street tanked both companies’ stocks on the announcement.
As to potential targets for Gemstar's (or better: MVSN) more aggressive approach on IPR: be aware and prepared.
Ever tried to find anything interesting on patents at You Tube? You would be surprised
A somewhat curious mixture of issues in patent law, ranging from Sisvels' enforcement on mp3 patents where Fraunhofer in Germany was the reail inventor on wasting money on R&D what has already been patented ("60,000 million euro, or the combined yearly revenue of Microsoft and Apple") and similar ostensibly IP mismatches, in "Patent Wars":
