Rebalancing the patent economy

By Patrick Terroir

This post provides a summary of Patrick’s article as published in IAM Magazine Issue 64.

As innovations are more and more the result of aggregation of inventions and as research strengths multiply and spread all over the world, the need for exchange of knowledge and circulation of ideas become the very condition for growth and development of the world economy and of each country and firm. But the patent economy is currently working on one leg only, the one of litigation and patent war. The patent market is stifled by many failures and the weakest but essential actors as are the SMEs and the PROs are the most penalized.

To rebalance the patent economy it is thus necessary to create the true market mechanisms which will allow to exchange and monetize patents in a transparent and secure way. The article reviews in this context the ways and means and the challenges to make such market mechanisms function. It shows that a market operator will play a decisive role and that differentiation in patent nature could reflect in a different type of market.

The impact and benefits of a true patent market will be deeply structural, providing many of the solutions that national systems can no longer offer, such as:

• Facilitating predictable prices (there can be no pricing without a market mechanism).
• Giving SMEs and other relevant entities real access to the market to acquire, transfer or monetize invention rights – this would mitigate the risks of patent infringement, and reduce the possibility of troll attack, by allowing all enterprises to acquire the necessary rights they need to operate freely.
• Encouraging the increase of supply and demand for inventions and rewarding research on a regular and healthy basis.
• Selecting useful inventions and eliminating patents of mediocre quality – which may be the only way to resolve the issue of bad patents.
• Making market exchanges safe and swift, thus helping to harmonise titles and conditions, and to simplify and secure contractual procedures
• Significantly reducing the cost of transactions.

[The full version of this article appears at IAM.]