Cost -Quality factors in patent systems

years Citations received Subsequent R&D Investments gave rise to further patents in same area + Technological importance At least 5 years Family size Cost / targeted market Renewals Cost of maintaining a patent Timeliness Opposition Timeliness, inter partessettlements Small share Litigation Timeliness, inter-partessettlement, data availability, Small share Firm market value, spin-offs, etc.<br><br> Patent value embedded as intangible asset Not at the patent level Surveyed value Patent value is known by inventors or managers Subjectivity, selection issues, limited samples Market potential Cost and risks associated with legal disputes Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 Yearsenforced EPC Countr. Adds 1 for each country / year: 10 initial EPO member states First 10 years after the filing date Maximum score: 100 Y1Y2Y3Y4Y5Y6Y7Y8Y9Y10 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 50, or 50% TheScope-Yearindex... The averagevalue of EP patents has decreasedby 9 SY 33 35 37 39 41 43 45 47 49 1980198119821983198419851986198719881989199019911992199319941995 Year of filing at EPO Average Scope-Year Index SY(10,10) from the date of filing SY(10,10) from the date of grant Cleardifferencesacrosstechnologicalfields, but commontrends 30 35 40 45 50 55 60 65 19801981198219831984198519861987198819891990199119921993199419951996 Year of filing at EPO Average Scope-Year Index Organic chemistry Biotechnologies Industrial chemistry Civil engineering Audio-video-media "The Scope-YearIndex allowsthe simultaneous quantification ofthe geographicalscopeand renewalsof patents intoa single value indicator.<br><br> "This indicatorrevealsa cleardeclineinthe average value of grantedEP patents, from1985 to 1995.... "Thereare strongtechnologicaldifferences , but similar trends. " The decrease was smaller than the growth in patent applications Two research questions related to this 'boom' 1.A problem?<br><br> Is it associated with a constant 'value' on average? 2.A solution? Do cfees dplay a role?<br><br> Table 1. EPO, USPTO and JPO: Basic figures, 2003 Why? to expensive ?<br><br> Not all domestic patents ? different patents ? EPOUSPTOJPO Total Patent Filings 116,613342,441413,092 Total Patent Granted 59,992 169,028 122,511 Geographical origins of patent filings (%) USA 27555 Japan 1618 88 EPC States50153 Others7134 x3 Caveats: EU does not include the domestic priority filings...<br><br> but "Similar percentage of filings from abroad at the USPTO and at the EPO, about 50% (2 nd filings) "Similar percentage of filings from Japan at the USPTO and at the EPO, about 18% : (2 nd filings) "They confirm that the US market is three times more attractive than the European market. Market size and patent filings, 2003 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 05010015020025030035040045050 0 Population (M) Patent file d USA EU 13EU 25 EU 3 Japan Market size and geographically designated patent filings, 2003 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 050100150200250300350400 Population (M) N° of filin g Japan EPO 3 USA EPO 13 Not all patents arethe same "Numberof claims of applications atthe USPTO: 23-24 "AttheJPO: 7 "AttheEPO: 18&. "Manyotherdifferences...<br><br> Market size and geographically designated filings of claims, 2003 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 050100150200250300350400 Population (M) M of claims f i Japan EPO 3 EPO 13 USA Why-no marketsize effect? Why-fewerpatents atEPO? "EPO = second filings(howeverJapan&) "Not aEuropean marketfor technology: once grantedthe Europeanpatent must bevalidated, translated&.<br><br> In eachindividualmembercountry "A matterof cost? Costeffectinthe literature? "Surveys always underline the high cost of patenting perceived by firms "Surveys always underline a lack of confidence in the IP system& "BUT: 3No correlation with patenting behaviour 3Criticisms come from serial patentees...<br><br> "IP Professionals generally argue that fees do not affect patent behaviour& self fulfilling prophecy? The costof patenting " Official fees " Patent attorney for document " Patent attorney for interaction " Patent attorney for translations " Validation fees " Renewalfees In house or outsourced+ transaction cost Costisunique for eachpatent: "Qualityof services "Numberof claims/page "Desiredgeographicalscope "Desiredspeed of services "Desiredroute (PCT, Direct&) "Hypotheses: 33 or 13 EU membercountries 3Averagenumberof claims 3To grant, to 10 years, to 20 years Comparative cost structure of patent applications and maintenance 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000 100.000 110.000 120.000 130.000 EPO3EPO13USPTOJPO Process costs Process and translation Process and external serv. TOTAL 10 years TOTAL 20 years 1,856 4,670 6,575 1,541 8,070 20,175 Proposals for comparative cost analysis: "Processandtranslation costsmore reliable(but no professionalrepresentationcosts) "Analysethe costperclaim "Analysethe costperclaimper marketunit (capita) : 3C-index Patent costsperclaim inthe threeoffices 0 1000 2000 3000 4000 5000 6000 7000 Process costsProcess and translation Process and external serv.<br><br> TOTAL 10 yearsTOTAL 20 years Cumulative costs EUR EPO13 USPTO EPO3 JPO European and Japanese costs relative to the US PATENTS Processand translation TOTAL 10 years TOTAL 20 years EPO3 2.61.72.6 EPO13 6.6 4.2 7.8 JPO 0.50.61.1 CLAIMS EPO3 3.42.23.4 EPO13 8.4 5.3 10.0 JPO 1.71.93.5 Millions of claims filed vs. process cost per claim per capita : 3C-index 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 0,00,51,01,52,02,53,03,5 EUR M of clai m USA Japan EU 3 EU 13 Source: François and van Pottelsberghe, 2006 Detailedfees (estimatedimpact: currentevidence) "Cumulative feesup to grant: NPOs (---) "Cumulative feesup to grant: EPO (---) "Validation fees: EPC (---on validations) "Renewalfees: EPC (---on validations) "Claim-basedfees(---on size of patents) Conclusions "Theboom in patentingisassociatedwitha drop inthe averagevalue of patents , as witnessedbytheSY index. "Fees have a substantial impact, contrarily to common believes "The higher rigor of the EPO process would justify higher examination fees and explain a smaller demand for patent...<br><br> "but not the 'virtually' higher costs related to validation, translation, transactions, renewals in each individual member state Rerefences: available on RePEcwebsite GuellecD. and B. van Pottelsberghede la Potterie, 2007, The Economics of the European Patent System, Oxford University Press , Oxford, 250 p.<br><br> van Pottelsberghede la PotterieB. and D. François, 2006, The cost factor in patent systems, CEPR Discussion paper, 5966, and CEB working paper.<br><br> ArchontopoulosE., D. Guellec, N. Stevnsborg, N.<br><br> van Zeebroeckand B. van Pottelsberghede la Potterie, 2007, When small is beautiful: measuring the evolution and consequences of the voluminosityof patent applications at the EPO, Information Economics and Policy. van Pottelsberghede la PotterieB.<br><br> and N. van Zeebroeck, 2007, A Brief History of Space and Time: the Scope-Year Index as a Patent Value Indicator Based on Families and Renewals, CEPR Discussion paper, 6321forthcoming in Scientometrics(2008) . de RassenfosseG.<br><br> and B. van Pottelsberghede la Potterie, 2007, Per un Pugno diDollari: a first look at the Price Elasticity of Patents, CEPR , and CEB working paper, forthcoming. <br><br>

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