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Does “Strategic Patenting” Threaten Innovation and What Could Happen If It Did?

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Driving the Economy through Innovation and Entrepreneurship

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Abstract

Recent buyouts of Nortel’s patent portfolios by a consortium including Microsoft, Apple, and Sony and Motorola Mobility’s by Google have focused attention on the role of intellectual property (IP) in business strategies. IP changed a lot these last 15 years. New patent-eligible subject matters (biotechnology, software) and regulatory developments in the United States have since the mid-1980s led to a rapid growth of patenting, to a fast raise of patents’ value but also to the deterioration of their average quality. It also led to the massive use of strategic patenting by firms. Globalization, network organizations, and generalized subcontracting can explain part of an evolution that could have a significant impact on the pace and direction of innovation. These changes create barriers to new entrants, divert R&D budgets from research, and bring major uncertainty to new entrants who never know whether they infringe a patent or not. Universities that file patents may neglect basic research, while firms that indulge in strategic patenting spend an increasing proportion of their R&D effort in legal expenses and defensive strategies. In short, they could slow the pace of innovation and harm those industries that innovate the most.

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Notes

  1. 1.

    The data used in this chapter are all of US origin. This choice is justified because the changes described here took their source in the United States. It is in this country that emerged a market for patents, and it is there that most of its specialists work: 72% of brokers are installed in the USA (Monk 2009). This is due to the size of the US market and to the specifics of its legal environment.

  2. 2.

    And may continue to do so as US courts opened the door to the patentability of diagnoses as in Mayo v. Prometheus Labs.

  3. 3.

    These companies are more numerous that one can imagine, and not just American. They have grown since one of them got, through transaction, $162 million from RIM, the Blackberry producer. A specialist in these issues identified 51 NPEs in the US (Shestra 2010).

  4. 4.

    Once a patent is granted by the European Patent Office, it must be validated in each country in which the applicant seeks protection. It usually means translation in the national language.

  5. 5.

    Hostility to protectionism was particularly strong in Britain, where it gave birth to an abolitionist movement and in Germany. Defenders of patents saw it a protection of the industry similar to customs duties.

  6. 6.

    This thesis is supported by recent studies that establish a correlation between the productivity and mobility of researchers (Hoisl 2007).

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Authors and Affiliations

  1. UQAM, Paris, France

    Bernard Girard

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  1. Bernard Girard
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Correspondence to Bernard Girard .

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Editors and Affiliations

  1. , Department of Management Studies, Indian Institute of Science, Bangalore, 560 012, Karnataka, India

    Chiranjit Mukhopadhyay

  2. , Department of Management Studies, Indian Institute of Science, Gulmohar Marg, Mathikere, Bangalore, 560012, Karnataka, India

    K B Akhilesh

  3. , Department of Management Studies, Indian Institute of Science, Gulmohar Marg, Near-Centre For Neroscience,Mathikere, Bangalore, 560012, Karnataka, India

    R. Srinivasan

  4. , Department of Management Studies, Indian Institute of Science, Gulmohar Marg, Near-Centre For Neroscience,Mathikere, Bangalore, 560012, Karnataka, India

    Anjula Gurtoo

  5. , Department of Management Studies, Indian Institute of Science, Gulmohar Marg, Mathikere,, Bangalore, 560012, Karnataka, India

    Parthasarathy Ramachandran

  6. , Department of Management Studies, Indian Institute of Science, Gulmohar Marg, Mathikere, Bangalore, 560012, Karnataka, India

    Parameshwar P Iyer

  7. , Department of Management Studies, Indian Institute of Science, Gulmohar Marg, Mathikere, Bangalore, 560012, Karnataka, India

    M Mathirajan

  8. , Department of Management Studies, Indian Institute of Science, Gulmohar Marg, Mathikere, Bangalore, 560012, Karnataka, India

    M H Bala Subrahmanya

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Girard, B. (2013). Does “Strategic Patenting” Threaten Innovation and What Could Happen If It Did?. In: Mukhopadhyay, C., et al. Driving the Economy through Innovation and Entrepreneurship. Springer, India. https://doi.org/10.1007/978-81-322-0746-7_27

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