Patent infringement – the crime of not making it a crime

 

Inventors and SMEs rely on enforceable IP rights – particularly patents – to protect their inventions and innovations. They often need that protection disproportionately more than large companies, because most inventors and SMEs can’t afford the legal costs of fighting predators – typically in the £150-750,000 region.

Unfortunately, there is a yawning chasm between the theory of patent protection and the reality, which is that patents actually offer little or no protection to inventors and SMEs. If you can’t afford to defend your patent in court, you’ve lost no matter how strong your case, and your patent is useless.

But you won’t hear much about that major downside from IPO, the UK government patent office that earns its living from patent fees.

We’re reminded of that by a recent IPO press release celebrating the seizure of counterfeit goods worth £70m. That success is welcome, but we take serious issue with IPO’s suggestion that counterfeiting is the only form of IP crime. The elephant in the room is patent infringement. This gives big corporations a licence to rob inventors and SMEs of their IP – often merely by threatening legal action – and probably costs the UK economy far more than counterfeiting ever could.

And IPO and the government are complicit in patent infringement because neither does anything to prevent or punish it. Complicit, in other words, in helping to strip the UK of valuable IP assets.

Patent infringement is a crime in many countries, but not in the UK. There appears to be no official list, so we’re grateful to readers of the IPKat blog for reporting that countries where it is a crime include Austria,  Belgium, Brazil, Czech Republic, Denmark, Finland, France, Germany (up to five years’ imprisonment), Hungary, Japan, Netherlands, Norway, Portugal, Romania, Slovakia, Spain and Thailand. There are probably others.

Ministers with no technology background don’t understand innovation

Why does the UK government not follow suit? The simplest answer is that it doesn’t care. Successive governments devoid of ministers with a technology or SME background don’t understand where innovation comes from and seem to regard SME owners as troublesome peasants rather than drivers of economic recovery.

As was evident from last year’s Hargreaves Review, ministers and civil servants would sooner take advice on patents from anyone but SMEs. As the SME Innovation Alliance points out, the only patent ‘expert’ on the Hargreaves panel was a former senior IBM employee.

How much will an IBM man know about the IP problems of SMEs? Probably quite a lot. Consider this quote attributed to Joseph Shapiro, another former senior IBM manager: ‘Large companies routinely infringe intellectual property of start-ups or individual inventors. They will not sign non-disclosure agreements to protect others’ IP. When shown relevant patents they need to license, they literally say “Sue us”, knowing that deeper pockets trump a valid claim’.

So how much will an ex-IBM manager care about the IP problems of SMEs? That may be judged from the Hargreaves Review conclusion that the patent system is basically OK as it stands.

It’s possible that the complacency of IPO and HMG will be tested soon, as moves are afoot to sue IPO for mis-selling patents. More on this in due course. Establishment wagons will doubtless be circled at the first hint of any threat to the UK’s smug patenting status quo, but many inventors and SMEs suckered into paying through the nose for unenforceable patents will regard such a challenge as long overdue.

If SMEs are to contribute to economic growth, they need more than encouragement to innovate. They need support to ensure that they benefit fairly from their innovations. Otherwise, why bother? At present that support isn’t there. Until it is, inventors and innovative SMEs remain vulnerable to a form of highway robbery committed by big corporations, and kept risk-free by an indifferent government.

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