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.
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.
