1 Patents Systems and Knowledge Policies Dominique Guellec Chief economist - EPO National Academy – January 2005 Advancing Knowledge and the Knowledge Economy European Patent Office

2 Outline of the presentation 1) The new economic importance of patents 2) Patent institutions must remain selective 3) Patent regimes as innovation policies

3 A surge in patent numbers

4 The surge in patent numbers Patent filings have doubled in OECD over the past decade.

5 Why the surge in patent numbers? Increased innovation - emergence of new technology areas (software, biotech); => More inventions to protect

6 The surge in innovation

7 Average annual growth rates of EPO applications – New technology fields

8 Changes in innovation systems enhance the role of patents - More profit is based on innovation. - Extremely high value of certain patents => Rambus / Infineon, 100 million USD drop overnight in stock market value (March 2004 ) - High profile litigation (EOLAS – USD 500 million)

9 Changes in innovation systems enhance the role of patents - More co-operation between firms. - Increased importance of start-ups, with no other asset than their technology. - Expansion of markets for technology (esp. licensing contracts). => Patents as protection, as signal of quality, as collateral, as asset

10 The patent system should adapt to this new context - Maintaining internal balance: Putting quality first. - Coordinating with other policies for encouraging innovation and diffusion = Playing an active role in innovation policies.

11 Quality: What does it mean? - Thoroughness of search and examination - Selectivity - Legal certainty - Disclosure - Timeliness - Costliness

12 Quality: What to do? - Ensuring the quality of applications => e.g. steep fees per additional claim, no-search decisions for “complex applications”. - Call for third parties’ knowledge of the art: EPO opposition system = 4.5% of grants, 1/3 maintained, 1/3 revoked, 1/3 amended. - Accumulating technology specific skills => EPO 14 Joint Clusters And certainly more.

13 Patent policy as part of innovation policies “ “The mission of the EPO - the patent granting authority for Europe - is to support innovation, competitiveness and economic growth for the benefit of the citizens of Europe.” => In Europe, EPO shall contribute to the Lisbon Agenda.

14 Patent policy as part of innovation policies - Patent information: Making available to all users the immense knowledge stored in patents databases = Diffusing technological knowledge (to society, to government branches) and protecting the public domain. - Valuation: As accounting standards are increasingly recommending capitalisation of IP, patent offices have potentially a role: providing certified information, guarantees etc.

15 Patent policy as part of innovation policies - Economic exploitation of patents: fostering licensing (providing information on the supply side, acting as clearing house). - Coordinating with parts of the government in charge of other components of innovation related policies: Public research, competition, industry etc.