66.7% of companies say implementing defensive patent strategies
is their greatest challenge
In preparation for the Global IP Exchange 2013, Legal IQ invited its members and the wider
community of legal professionals to take part in a short survey, which aimed to assess the
current industry trends and challenges. The survey consisted of half a dozen questions
designed to identify the current drivers behind filing of patents; the dominant challenges
projected for IP in the next 12 months; principal inhibitors for not filing patents; geographical
regions expected to be important for patent strategy in 2013; and which industries will face
the most changes over the coming 18 months. In this report we compare the results with the
findings of the 2011 survey, which asked international legal professionals working within
Patents the same questions.
Company Reputation and Product Image Fuel the Patenting Process
While there is normally a combination of factors behind the decision to file a patent, it seems
that there are three dominant drivers - to improve the reputation of the company and
product image, to increase licensing revenues, and prevent patent infringement from
yourself. Less dominant factors included the desire to improve company position when
negotiating with other companies in cross licensing agreements and to prevent others from
copying your products/services.
In comparison to the results of the 2011 Survey conducted by Legal IQ, not much has
changed - the two leading motivations to file patents were the same, although ‘increasing
licensing revenues’ (3.32), came out slightly ahead of ‘improving the reputation of the
company and product image’ (3.05). Similarly, the third and fourth motivations were the
same, but inverted: ‘to improve company position when negotiating in cross-licensing
agreements’ (2.47), came out slightly ahead of ‘preventing patent infringement from
yourself’ (2.44). As in 2012, the least dominant driver in 2011 was ‘preventing others from
copying products and services’ (2.11).
Reflecting on the trends revealed by the 2012 survey, Mikk Putk, Patent Attorney and Partner
at Sarap & Partners Patent Agency, says: “If we consider facts that companies file patents to
improve the reputation of their companies/products and the fact that too many similar
technologies were already identified and patented and least important is prevent others
from copying their products, what does it mean? Is it sign that most of filed patent
applications are not new?”
Cost and Company Bureaucracy are the Biggest Inhibitors to Patenting
On the flipside, there are a number of inhibitors which prevent companies from filing patents.
When asked to pinpoint the reason for deciding not to patent an invention, the main
justification was cost, followed by bureaucratic procedures. Other reasons stated were the
fact that too many similar technologies were already identified and patented, and a
preference for taking the trade secret approach.
Respondents to the Legal IQ Survey 2011 also provided the reasoning behind their most
recent decision not to file for a patent for an invention. Reasons given were more varied,
including: difficult infringement detection; lack of details of how to implement the invention;
lack of R&D resources to develop a reasonable technical disclose/solution of the invention;
the invention was not in core business/key technical area/in line with business strategies; prior
art document; too busy; non-patentable subject matter; strategic decision to keep knowhow as a trade secret/more profitable as a trade secret; lack of patentability technology
that will change in less than three years; and cost savings using the latest invention not high
enough.
Companies are Striving to Implement Defensive Patent Strategies
Implementing defensive patent strategies is by far the biggest problem identified by
companies which took part in the survey, with a 66.7% majority pinpointing this as their
greatest challenge. The survey also revealed cutting costs from portfolios to be a significant
problem, for 26.7% of companies. These basic findings are in line with the growing trend that
the patents market will become more defensive in terms of strategy over the next 5-years.
The results suggest that there will be a trend towards more efficient portfolio management,
rather than outright cost-cutting. This echoes the results of the Survey, which revealed a trend
towards assessing the patent portfolio functionality/efficiency before cutting costs and
functions.
The principal problems identified echo those revealed in the 2011 survey - where the top
challenge was also ‘implementing defensive patent strategies’, specified by 31.6% of
respondents, followed by ‘cutting costs from portfolios’ and ‘non-practising entities’ (26.3%,
respectively). ‘Filing patents in the BRIC region’ was similarly the least dominant challenge in
2011 (15.8%).
Remarking on the trends revealed by the survey results, Adrian Spillmann, PhD, Global Head
of Intellectual Property at Intercell AG, says: “In my industry, pharma and biotech, it is and still
will be a must to file patent applications and do extensive Freedom to Operate analysis for
active projects. I think what will change is we’ll be more quickly prepared to abandon cases
and to focus more on our own projects – a higher turn-over of patent portfolios and more
focus. I think that is what is meant when our industry speaks about prioritisation on a
defensive patent strategy.”
The US and Asia are the Focus for Expanding Patent Strategies
When asked to identify what which geographic region is likely to be the most important for
patent strategies in 2013, the US came up on top, pinpointed by a 40.0% majority of the legal
professionals who took part in the survey. The US was closely followed by Asia (33.3%), and
Europe (20%). South America was only on the radar as a future hot spot for 6.7% of the
companies which participated in the survey.
This indicates a shift in geographical outlook for the industry since 2011. Respondents to last
year’s survey in fact identified Asia as the principal region for expansion (36.8%), followed by
Europe, identified by 31.6% of participants. The US was actually the third priority region,
pinpointed by 26.3% of respondents. Again, however, South America trailed behind, picked
out by just 5.3% of those who took part in the survey as a key area for Patent strategy in 2012.
Reflecting on changing trends in geographical spread, Mikk Putk of Sarap & Partners Patent
Agency, says: “Asia, specifically China, will be one of most important regions. And it’s a very
significant sign that patent searches in foreign languages are becoming more and more
important. Very soon, probably by 2014, we will have new patent system Community Patent,
which means that lot of companies will redevelop their patent strategies. Considering these
three facts, I assume, that in coming years we will see more and more patent lawsuits.”
Adrian Spillmann of Intercell, adds: “Trends across the industry are more emphasis on Asia, i.e.
China, Korea, (but less on Japan), a more focused approach in Europe (i.e. core countries
such as France, UK and Germany, Czech Republic, etc but possibly without Italy and Spain),
Brasil, Chile, and of course continued filings in US and Canada (refocusing reflecting
economic change).”
Pharmaceuticals and Software Patenting Face Significant Change by 2014
The Pharmaceuticals industry was predicted to be in line for the most changes to patenting
over the next 18 months – pinpointed by 60% of those who took part in the survey. Significant
change was also expected in Software (26.7%), Energy (20%) and Telecommunications
(13.3%), followed by Automotive, Hi-Tech and Robotics (6.7%). None of the respondents to
the survey expect particular change within the aerospace industry, where patent processes
are anticipated to remain relatively static.
In the 2011 survey, the top three industries predicted to experience changes in patenting
were the same, (Pharma, Software and Energy), although there has been a slight shift in the
order: In 2011, Energy led the way, selected by 42.1% of the respondents, followed by
Pharmaceuticals (31.6%), and Software and Automotive (26.3%, respectively). Change was
expected in Telecommunications by 21.1% of participants, while interestingly, Robotics and
Aerospace were regarded as industries that would remain static in terms of Patent
developments.
If you would like to learn more on this subject, you may be interested in attending The Global
IP Exchange 2013 is due to take place from 3rd – 5th March in Dolce Munich Hotel, Germany.
For more details about the event, please visit: www.globalipexchange.co.uk , contact the
enquiries team on +44 (0) 20 7368 9404 or email [email protected].