In general the term “patent thicket” describes a situation where a product involves a web of patents that are owned by a number of different patentees so that a company which wants to commercialize the product is required to “clear” all the patents involved. This phenomenon is well-known in complex technologies, such as information and communication technologies, and in technical fields where a number of companies compete at the same level so that a fragmentation of patent ownership occurs. A changing research environment, increasing complexity and sophistication of technology and certain patenting strategies may have an influence on patent thickets.
Although there is no generally agreed objective definition of the term “patent thicket”, it suggests negative effects due to a “thicket” of patents, in particular, in the sense that third parties may be blocked from using a patented technology. The potential problems addressed are centered on the excessive transaction cost. Some suggest that cross-licensing may solve the vertical R&D and hold-up problems. By entering a cross licensing agreement, companies may secure freedom to operate. On the other hand, there is a risk that the problem is exacerbated because each competing company tries to build a bigger patent portfolio than competitors in order to create a better bargaining power to negotiate cross licenses. Another solution consists of patent pools to reduce a transaction cost, although some raise concerns about their compatibility with competition law.
It can be expected that combination and assimilation of technologies will further develop in the future. The boundaries of so-called “fields of technology” are more and more blurred. The same is true for various industries. It is said that, in the future, communication, computing and consumer electronics (3C) will be integrated in a single home network. According to an OECD report, as innovation becomes more science-based, and multi-disciplinary research draws together researchers and innovators from different fields with different practices for protecting IP, limitations on research access could become more widespread.
The results of the empirical studies in this area vary. One study found that, among academic researchers in the biomedical field, only 3% abandoned a project during the last three years because of too many patents covering their research field. It found that access to tangible research input was more problematic, as 20% of academic-to-academic requests were refused.87 However, another survey found that 40% – including 76% of those in the biosciences industry – responded that their research was affected by difficulties in accessing patented technologies: 58% reported delays, 50% reported changes in their research plans, and 28% abandoned their research. The most common reason for changing or abandoning the research was overly-complex licensing negotiations (58%), followed by high individual royalties (49%).
In sum, threats to an effective and efficient patent system are perceived in respect of the following key concepts:
Although there is no generally agreed objective definition of the term “patent thicket”, it suggests negative effects due to a “thicket” of patents, in particular, in the sense that third parties may be blocked from using a patented technology. The potential problems addressed are centered on the excessive transaction cost. Some suggest that cross-licensing may solve the vertical R&D and hold-up problems. By entering a cross licensing agreement, companies may secure freedom to operate. On the other hand, there is a risk that the problem is exacerbated because each competing company tries to build a bigger patent portfolio than competitors in order to create a better bargaining power to negotiate cross licenses. Another solution consists of patent pools to reduce a transaction cost, although some raise concerns about their compatibility with competition law.
It can be expected that combination and assimilation of technologies will further develop in the future. The boundaries of so-called “fields of technology” are more and more blurred. The same is true for various industries. It is said that, in the future, communication, computing and consumer electronics (3C) will be integrated in a single home network. According to an OECD report, as innovation becomes more science-based, and multi-disciplinary research draws together researchers and innovators from different fields with different practices for protecting IP, limitations on research access could become more widespread.
The results of the empirical studies in this area vary. One study found that, among academic researchers in the biomedical field, only 3% abandoned a project during the last three years because of too many patents covering their research field. It found that access to tangible research input was more problematic, as 20% of academic-to-academic requests were refused.87 However, another survey found that 40% – including 76% of those in the biosciences industry – responded that their research was affected by difficulties in accessing patented technologies: 58% reported delays, 50% reported changes in their research plans, and 28% abandoned their research. The most common reason for changing or abandoning the research was overly-complex licensing negotiations (58%), followed by high individual royalties (49%).
In sum, threats to an effective and efficient patent system are perceived in respect of the following key concepts:
Accessibility: The access to the international patent system covers not only patent granting procedures but also patent enforcement and invalidation procedures. Overall costs of obtaining and enforcing patents are primary obstacles for enhancing the access to the international patent system and to the benefits derived therefrom. Further, lack of support structures in the social, legal and economic market frameworks is another obstacle. The concept of accessibility also includes accessibility to technologies within the framework of the international patent system at fair cost. Further, certain emerging technologies and some particular business models have raised concerns as to the costs for third parties.
Timeliness: The unprecedented increase in demand for patent rights and the subsequent increase of the workload for patent offices has resulted in longer prosecution periods. Although a number of international efforts have been undertaken to address this problem, the need to develop improved platforms to facilitate further cooperation has been advocated.
Quality: A high legitimacy of the output of patent offices (for example, decisions to grant a patent or refuse a patent application) is desirable, since the costs arising from the mistakes made by patent offices will generally be borne by the users of the patent system, including the general public. An international mechanism to ensure the quality of patents would facilitate further cooperation among the offices. National patentability requirements are also under scrutiny, since national search and examination results increasingly have an international dimension.
Flexibility: The flexibility of the international patent system has undergone a twofold test. The first test related to the harmonization of patent laws, with a view to enhance accessibility, legal certainty and quality of the system and promote international cooperation. The second one tested the diversity of participants in the international patent system as well as the geographic distribution of patents. Further, depending on the fields of technology and business models, innovation and exploitation mechanisms vary significantly. An international framework that is flexible enough to support and meet various needs is requested.
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