Patenting Your Invention: the Ugly Truth – Page 10


Will China capsize the patent system?


   Emerging economies will have an enormous impact on the patent system, and none more so than China, whose IP strategy includes filing a million patents a year by 2015, aided by a system of rewards to those filing the most applications.

   To put this in perspective, the US Patent Office (USPTO) currently receives 450,000 patent applications per year from all sources (and rising), while UK-IPO lags with 22,000 (and falling). The USPTO figure is split roughly 50-50 between US and non-US applications, so the Chinese aim is to file at four times the rate of US applicants.

   Commentators predict millions of poor quality patents, in Chinese, that act as landmines for any company wanting to do business in China. (The searches we carry out at already bear out the predictions of poor quality, compounded by minimal detail and very rough and ready translation. We also suspect that the filings of some Chinese ‘inventors’ owe much to previous patents or existing products.) But what about the effect on the global patent system?

   The USPTO – an organisation widely regarded as in deep trouble – already has a backlog of over a million applications. A deluge of Chinese filings can only make things much worse. Even if they’re mostly China-only applications for now, they’ll still be prior art and it won’t be long before Chinese companies routinely seek multinational cover. Translation problems alone could become horrendous. And inevitably, much more IP litigation will take place – is already taking place – in Chinese courts. That’ll be fun.

   And that’s just China. Patent applications in India are starting to increase steeply too, and other rapidly developing countries will folllow suit. Could USPTO, UK-IPO and other national patent offices cope without massive expansion? As the system currently operates, it seems unlikely.

   China could be the catalyst that either kills or cures the patent system. Without fundamental change, an already bloated system could collapse under its own weight fairly soon. The era of domination by the USA and Europe, and the primacy of English, is coming to an end. It’s merely a matter of time.

   Given that patents last up to 20 years, anyone thinking of filing in 2013 ought to think hard about the possible state of the IP market post-2015 – by which time they might still be waiting for their patent to be granted.

   And what will happen to patent costs? A question we’ve been asking for a while, without getting an answer, is how inventors and small companies in China, India etc will be able to afford multinational patent cover at present rates. US and European patentees already struggle to pay, so how will applicants fare in countries with much lower per capita incomes? One solution is state subsidy. Another is to farm out examination and translation to low-wage countries. Neither is likely to be acceptable to richer countries. So what will the answer be?

   It seems logical to assume that the world patent system can’t survive for long in its current form. Unless there are drastic changes – and the patent system doesn’t do drastic change – we think companies will increasingly throw up their hands in despair and start to ignore it. A kind of uncomfortable anarchy will reign, if it isn’t reigning already.


A culture of disregard


   This goes off at a bit of a tangent, but we think it’s relevant.

   At bottom, patents rely on the majority of people respecting them. It’s then easier to deal with the minority who don’t. But thanks to the internet and the opportunities it opens up for no-risk theft, we’re now in an era characterised by disregard for other people’s IP. People who wouldn’t physically steal so much as a can of beans will without conscience steal the work of musicians, film makers, games creators, writers and other producers of digital content. And they’ll scream blue murder about any attempt to thwart them with paywalls, copy protection, threats to disconnect or prosecute.

   To a worryingly large proportion of the world, nothing that can be digitised is sacred. What’s yours is now mine, whether the act of ‘sharing’ it hurts you or not.

   Once this culture of disregard becomes the norm, patents will be even weaker than they are now. They’ll be just one more thing to take without paying the originator. To publish a patent will be to give an invention away, because the remedies are so few, so complex and so expensive as to be unavailable to all but wealthy companies. And it doesn’t help that the patent system allows so many similar patents in so many fields. Confusion always helps thieves.

   So far, the threat to patentees comes from a relatively small number of infringers or trolls, and they’re already hard enough to deal with. But start getting very large numbers of infringers and it’s a different ball game. The risk to an individual infringer will be low, which will increase the temptation to infringe. Many won’t even think they’re doing wrong. The ‘all information should be free’ mantra will encourage them to believe they’re only exercising their natural, internet-given rights.

   An illustration, of sorts. We recently read a news item about a man who had ‘invented’ and manufactured a kind of umbrella that struck us as commercially hopeless but also familiar. We did a patent search and in minutes found four patents for exactly that idea. (Note that: four patents for the same idea.) Our man was infringing. Maybe he knew it, maybe he didn’t. Either way, he was behaving as though it was his idea, and at least one news platform took him at face value.

   But in the grand scheme of things, did it matter? Would he make a fortune? Probably not. He might be lucky to break even. Would the four infringed patentees miss out on a fortune? Probably not. In all likelihood there would be no big winners or losers here. So let it go. Let sleeping inventors lie.

   In this example and many others, who is entitled to what IP is in practical terms irrelevant, because the cost of enforcing a patent will far outweigh any financial benefit to anyone except the lawyers.

   The situation might change if the umbrella became a massive hit and a serious money-earner. But maybe only slightly. Our man would now in theory be worth pursuing for infringement. But his profits might give him the means and incentive to defend himself vigorously against a lawsuit, making it expensive and hazardous to sue him. That, or others would by now be infringing him…

   That’s the culture of disregard at work. It’s doubtless happening all the time – thousands of patents being casually infringed, sometimes innocently, increasingly deliberately. Often nobody loses on any major scale. But where do you draw the line? When can you not ignore infringement? As disregard for IP becomes endemic and enforcement costs climb, inventors and small companies will find they can’t draw that line anywhere. Unless we see very radical changes to the patent system – no more tinkering politely round the edges – those without deep pockets will find it next to impossible to enforce their patents. It will become pointless to try.

   In that event, there will either be much less innovation, or patents will be replaced by other, more practical forms of protection and deterrence. Innovation is an unquenchable characteristic of most economies, so that leaves only the second option.

  Overall, there is far too much wrong with the current patent system – with worse to come – for it to be considered fit for purpose. And yet for the time being, inventors will be compelled to continue using it because no one – not governments, not big business – is in the remotest hurry even to recognise the problems, let alone fix them.

   And here, on admittedly a rather bum note,  endeth the entire lesson. If you’ve stayed with us right the way through, thank you. We just hope it’s been a useful journey.





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