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Untangling the Economics of Patent Thickets (view source)
Revision as of 16:01, 19 June 2017
, 16:01, 19 June 2017→Definitions
A) '''Saturated Invention Spaces:''' The earliest definition of a patent thicket that we found is in Teece (1998), who points out a simple issue with patents. We refer to this as ‘saturated invention spaces’ and describe it as when a single firm, or a small number of firms, successfully patents an entire technological area. (p.15)
* '''''Coordination: Imperfect competition: a small number of firms hold all possible patent rights in an area'''''
Terms like “cluster”, “related”, “adjacent”, or “coherent group” to describe either patents or inventions. However, we also included several definitions that described patents as “minor” or “marginal” provided that there was no suggestion of bad faith
B) '''Diversely-held Complimentary Inputs (DHCI):''' 1) products require complementary patented inputs; 2) these inputs are diversely-held (i.e. held by N patent-holders); and 3) patent-holders set their license prices independently. (Shapiro, pg.17)
* '''''Coordination: patent holders determine licensing rates independently'''''
“Diversely-held” and “complementary inputs,” or clear synonyms like “dispersed” or “fragmented” pertaining to ownership and “Cournot problem”, “multiple marginalization”, etc. in the context of licensing of patents held by multiple parties
C) '''Overlapping Patents:'''
#Refinement patents and research tool patents could result in vertically overlapping patent rights (or at least contractual rights). (p.21)
* '''''Imperfectly defined property rights: wasteful duplication of licensing expenditure'''''
Any sense of patent overlaps including “overlapping claims” or “similar claims”, and/or uncertainty over whether multiple patents may simultaneously be infringed
D) '''Gaming the Patent System:''' There are information asymmetries between a patent applicant and the patent office and a patent applicant may take some inappropriate action, for example by applying for a patent that is not novel or is obvious. Such an inappropriate action can impose costs on the patent office and may generate negative externalities, imposing costs on genuine innovators. We refer to this situation as ‘gaming the patent system’. (p.21)
*'''''Imperfect competition: a small number of firms hold all possible patent rights in an area'''''
Primarily descriptions of patents as “questionable” “dubious” “bad”, “likely invalid” and “junk,” and phrases congruent with “impeding genuine innovators” or “rent-seeking activities”, as well as other indications of bad faith
====Modern Terms====
E) '''Transaction Costs:''' Patent applications are subject to transaction costs in the form of prosecution costs and renewal (‘maintenance’) fees. These costs and fees are supposed to de-incentivize low value patents. However, they may also de-incentivize invention by small firms and individuals. (p.13)
F) '''Probabilistic Patents:''' Lemley and Shapiro (2005, 2006) emphasize that patents are ‘probabilistic’. They suggest that “there is no way to determine with certainty whether the patent is valid and infringed without litigating to judgment." Enforcement of patent rights - observing and redressing infringement of patent claims - is therefore both costly and uncertainty. (p.11)
G) '''Unspecified/Extended Use:''' Kiley (1992) claims that applying for a patent based on an inventive step that does not have a clearly articulated stand-alone commercial value creates economic inefficiencies. But often it can be difficult to foresee which particular use of an invention will be profitable and which won’t. (p.8)
