Patents - Measuring a Piece of Innovation
By Katie Barry
As defined by the United States Patent and Trademark Office, “A patent for an invention is the grant of a property right to the inventor, issued by the Patent and Trademark Office. The term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees. US patent grants are effective only within the US, US territories, and US possessions.”
Each country has its own rules and regulations regarding patents and an inventor must be careful to follow the rules and regulations for each territory. Some reciprocity exists, but the inventor is ultimately responsible for assuring the protection of the invention(s).
Patents and Innovation
In 1899, the Commissioner of the U.S. Office of Patents, Charles Duell, said, “Everything that can be invented has been invented.” Duell’s opinion was anything but correct as patents continue to be not only a source of pride, but also of contention.
A patent is an early step to innovation. Without something new to develop, there is no property to develop upon and share with a marketplace. Not only that, an approved patent application prevents others from using the invention without the permission of the inventor. Preceding innovation, the patent announces the new development and keeps companies pursuing new and unique competitive advantages.
Within the United States
The patent leader in the United States, by a wide margin, is IBM. For fourteen years, IBM has been the patent leader and set a new record in 2006 with 3,621. (To put this in historical context, America’s most famous inventor, Thomas Edison, submitted 1,093 patents in his lifetime.)
The European Union’s Internal Market has agreed upon a trademark policy, but a patent policy is still to come. In its absence, inventors can work with the World Intellectual Property Organization (WIPO), an international monitoring forum for protecting inventor’s rights. A part of the United Nations, WIPO administers the Patent Cooperation Treaty (PCT), which unifies international patent regulations among 125 Paris Convention members. Rather than needing to file 125 separate applications, WIPO accepts one application on behalf of all 125 and streamlines the complicated legal process.
The United States leads international patent applications as recognized by WIPO, submitting 49,555 out of a total of 145,300 filed in 2006. Japan and Germany followed with 29, 906 and 16, 929 applications respectively.
If Not Patents…
The numbers listed above are impressive. If each application led to a breakthrough/disruptive innovation, the numbers would be more impressive, but applications are only a step in the process of unleashing an innovation to the marketplace.
The United States Department of Commerce named the “Measuring Innovation in the 21st Century Economy Advisory Committee” in 2006. This committee recently held its first meeting as it works to determine the metrics for measuring innovation in the economy.
A patent success ratio (PSR) has been suggested as a better measure of innovation (rather than the measure of patents alone). The PSR is the number of successful patent applications in relation to total patent applications. Analysis of the 1915-2001 time frame showed a correlation to gross domestic product, but the jury is still out on PSR’s value of a metric.
The regulation of patents is a hot topic – both in the United States and internationally. The more complex the world becomes, the more difficult it is for patents to be efficiently and effectively granted and protected across the globe.
A case decided in January 2007 by the U.S. Supreme Court allows for more easily challenged patents. Although this case focused specifically on invalided patents, broader challenges of the overall infallibility of a patent and its rule over an aspect of intellectual property are expected to now be more open to challenge. This case brings to the forefront the argument that patent reform may be necessary in this world of open information; the patent realm is different than the world in which the rules and regulations were developed.
Patents are an efficient measure of only one aspect of the innovation process – the development and property grant of an invention. An invention may lead to an innovation, but it is not the sole requirement – or measure – of an innovation.