Emerging Market Tech Series: The International Patent Mess

The tech world and the patent system have long been at odds.  The fast changing nature of technological innovation is ill suited to the slow and bureaucratic Patent and Trademark Office.  Last year’s Leahy-Smith America Invents Act sought to address some of the issues.  The act represented the most sweeping changes to U.S. patent law since 1952.  Among its major changes were switching from a first-to-invent to a first-to-file system and overhauling the way the PTO collects its fees.

While the bill made important steps in the right direction, it was lacking in a few key areas that are critical to the tech industry.  First, it made no major changes with regard to patent lawsuit reform.  If you have been following the current mess between Apple and Samsung it should be clear just how badly those reforms are needed.  Second, it did not go far enough in delineating the special needs surrounding technology patents.  Patents are lengthy, often lasting for 20 years.  In the tech market 20 years is an eternity.  Considering that technology tends to build off earlier innovations and new iterations frequently have components of old ones, this approach is particularly ill suited to the fast moving internet age.  In fact, just last week, Google’s Public Policy Director, Pablo Chavez, suggested it might be time to ditch patents altogether when it comes to software.

Yet, as complicated and convoluted as the American patent system can seem, it doesn’t hold a candle to the mess that is international patents.  Patents are country specific and their legal protection stops at a nation’s borders.  A patent in the United States does nothing to protect a company’s ideas in China, India, or any other country in the world.  To get truly global protection on an idea it is necessary to file for patent protection in multiple countries.  This means considerable time and expense spent on legal fees and wrangling with foreign governments.  On Wednesday of this week, the Europe Chamber of Commerce called on China to overhaul its patent system.  It cited low standards leading to too many patents being issued in instances that don’t warrant one as well as unclear standards surrounding national security reviews.  The group issued a 210 page report with 52 suggested changes.  If you need further evidence of China’s patent mess just ask the plethora of companies who have shuttered operations in China after serious intellectual property theft.  Multiply this problem by 194 and you start to get a picture of the serious challenges facing tech companies seeking patents abroad.

In today’s global supply chain components of a hardware device might be made in 5 different south Asian nations and sold in another 20 European countries.  Each country has its own deadlines, forms, and nuances.  The Patent Cooperation Treaty of 1970 streamlined the application process for international patents, but each nation still makes its own determinations and a truly international patent still does not exist.  As the internet age progresses and Moore’s Law seems as unabating as ever it might well be time to rethink the way patents are issued on an international level. 

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