Intellectual Property Programme • Volume  • Number  • 23rd September 2009

IP Authorities Tackle Challenges Facing Global IP Infrastructure

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High-level officials from national and international intellectual property (IP) authorities discussed challenges facing the global IP infrastructure, including the effects of the current financial crisis, at a two-day meeting hosted by the World Intellectual Property Organization (WIPO) last week. The participants outlined several key goals for the future, first of which was reducing the worldwide backlog of 4.2 million unprocessed patent applications through increased coordinated international action to enhance the efficiency of operations and improve the quality of patents. Francis Gurry, WIPO’s Director General, stressed that IP authorities should focus on modernising the global IP infrastructure by non-legislative, practical measures, including cost reduction collaboration and standardisation.

Addressing the issue of the backlog, Alison Brimelow, president of the European Patent Organization (EPO), underlined that, paradoxically, the structure of the current patent system rewards slowness and low quality and “doesn’t seem to be delivering quite the effect on innovation and competition it was supposed to.” Instead, the system’s extensive backlog of unexamined patent applications breeds uncertainty. What is needed are better and fewer applications including better prior art searches. The EPO remains far from that goal: about 60 percent of the applications it received in 2008 are expected not to be granted. Worldwide, the current patent backlog is increasing by 8.7 percent per year, a growth rate that Gurry called “unsustainable.”

Collaboration arrangements to be prioritised in Patent Cooperation Treaty

Participants agreed that national patent offices can help reduce the backlog by collaborating with their counterparts in other countries. Unlike the harmonisation of substantive patent law, technical collaboration, work sharing, standardization and global information services seem less controversial.

For instance, the so-called “IP5″ offices - from China, Europe, Japan, South Korea, and the United States - are sharing information in their network on the basis of the Patent Prosecution Highway (PPH). The PPH is a series of bilateral agreements in which a second national or regional patent office accepts certain preliminary work or documents from the first. “We would like to see all of these experiments multilateralised in the PCT,” Gurry mentioned.

In this context, the United States Patent and Trademark Office (USPTO), Japanese Patent Office (JPO) and EPO, partners of a trilateral PPH Agreement, signalled their readiness to integrate PCT work products, such as international preliminary reports on patentability, in their PPH projects. Koichi Minami, the deputy commissioner of JPO, said that these plans with the IP5 group are beginning to reflect the “growing demand for work sharing”. The IP5 received 1.4 million patent requests in 2007, of which 420,000 were duplicate applications.

New initiatives for work-sharing were presented at the meeting, including a Nordic Patent Institute, the Vancouver group (Australia, Canada and the UK) and a Latin American project for work-sharing in research and data examination (Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Suriname and Uruguay in partnership with the Inter-American Development Bank). All of these initiatives are ultimately compatible with a strengthened PCT system, Gurry said.

Addressing concerns of developing countries over the harmonisation of substantive patent law through strengthening the PCT, Gurry said that the roadmap for the future of the PCT is not about to eliminate flexibilities in the WTO’s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Jorge de Avila, President of the Brazilian National Institute of Industrial Property, commented that any harmonisation beyond that which is necessary for practical cooperation would be “radical at the moment.”

Influence of the economic crisis on IP systems

The impact of the economic crisis on the IP system has varied across the regions of the world, Gurry noted. Patent applications dropped by 14 percent in the United States, he said, but they jumped 19 percent in China. Worldwide, patent applications are expected to fall by 5 percent this year. However, the financial crisis could present some real challenges to the current system. “History has shown … that companies and countries which continue to invest in new products and innovation during times of economic recession will be those that will be best positioned to take advantage of the recovery, when it arrives,” the director-general noted.

The World Intellectual Property Indicators report showed that up until the financial crisis of 2008, patent and trademark filings were still rising. According to the report, residents of the United States and Japan owned nearly half of all of the patents in force in the world in 2007.  But thanks to the current 8 percent drop in patent applications in at EPO, the crisis can give the organisation a chance to reorient the administrative infrastructure of the patent system, as Brimelow stated.

Dominique Foray of the École Polytechnique Fédérale de Lausanne welcomed the trend towards giving greater attention to economic analysis in the work of IP offices.  Patents are doing good in some sectors and harm in others, he said, and policy makers will have to more carefully design the patent system according to the specific and differentiated economic needs of each sector. Understanding how economics and patents affect innovation is crucial to improving the international patent system, he concluded.

ICTSD reporting; WIPO PR/2009/604, Geneva, 18 September 2009, WIPO Symposium Concludes Global patent Application Backlogs unsustainable; WIPO PR/2009/603, 18 September 2009, WIPO Report Shows Growth in IP Rights before Onset of Economic Crisis; World Intellectual Property Indicators report, IPW, WIPO, 20 September 2009; IP-Watch, 17 September 2009, Brimelow Stresses Need For Better Patent System, Discusses Harmonisation; IP-Watch, 21 September, “IP Authorities” Pay Homage TO PCT, Call For Action on Harmonisation, Backlog.