Patents’ Changing Life Cycle in Focus

(IPRinfo 2/2008)

Niklas Bruun
Professor, Director
IPR University Center

Since the early 1970s, The Finnish AIPPI Group has a tradition of arranging high level symposiums with the aim of combining theory and practice concerning selected patent issues.

We have gathered together academics, patent attorneys and lawyers as well as others concerned for intense discussions on issues of importance and interest.

We live in a new brave world where not only the life cycle of individuals but also that of inventions have become more diverged and complicated, which again poses challenges to all those who have to make various decisions concerning patents.

Nearly two million patent applications every year
Today we have more patents than ever; over 5 million valid patents are in force on a global level. According to the WIPO statistics, the number of patent applications has doubled worldwide in 20 years. We have now about 1,7 millions of applications annually. In other words, there are well founded arguments behind the description of the present global situation as a ”Patent Flood”.

When major Asian countries like China join the club of leading countries for patents, which is happening very rapidly, we will experience further increase in the numbers of applications and granted patents. It goes without saying that the life cycle of these patents differ to a large degree.

Furthermore, the trend is that the growth in patent applications and grants has been accompanied by a comparable rise in the number of claims per patent.

Industries utilise their patents differently
One general observation is that patents are used differently in separate areas of industrial or economic activities. All statistics show that e.g. patents in the chemical and pharmaceutical industries are different from software patents or patents in traditional technologies.

Moreover, the patent strategy adopted by an applicant must be applied not only when using the granted patent, but already in claim drafting and making decisions on how to further deal with the patent.

Patent management has, indeed, become an important area of corporate leadership. We are probably only seeing the beginning of an evolving market for patents.

In the future, we will find all kind of entrepreneurs and actors dealing with patents without using the patents themselves in the traditional industrial way. Patents will become real market commodities, which evidently will change the customary functions of the exclusive right.

The number of patent disputes may explode
Another observation is that the numbers of patent disputes and litigations show no sign of decreasing. On the contrary, it seems that Courts both in Europe and in the US have to set limits and somehow balance the patent system in times of uncertainty as not much clear guidance is coming from legislators.

Also, issues of enforcement on a global level have been difficult to solve. Even in Europe with its strong European legislator and the internal market, it has not been possible to achieve any common enforcement mechanisms. Principles of territoriality based on sovereignty of Nation States still prevail.

Against this background, there are good reasons to discuss different stages or phases in the life of a patent. Is there life after grant? This question is justified for the simple reason that most patents never are used, they just die out after a few years of passive existence.

But even for those patents that live a ”real” life – in the sense that they are of some value for the rightholder – their life and its cycle may be very different compared to patents of the past.