Patent Aggregation Redefinition and Taxonomy of Its Activities Useful for Competition Law

Abstract

Patent aggregation, or the monetisation of patents without selling patent-implementing products, is a rising practice in the electrical engineering industry. However, the complexity and distance of this phenomenon from traditional patent exercises prevent a clear assessment of its impact on innovation. On the one hand, patent aggregation may spur innovation by determining efficiencies in licensing or litigation and by conveying liquidity to inventors. On the other hand, patent aggregation might also unduly tax technological developments by enforcing otherwise dormant patents. Since the relationship between patent aggregation and innovation is uncertain, it is unsettled whether EU competition law can remedy anti-innovative patent aggregation instances. Building on existing economics and legal scholarship, this paper contributes to the competition law understanding of patent aggregation providing both a definition and a taxonomy of its identifiable activities. Accordingly, patent aggregation is redefined as any activity where electrical engineering patents, patent applications, or their commercialisations rights, aggregated under common ownership or control through direct prosecution or transfer, are then used for non-manufacturing purposes. As such, patent aggregation activities are divided into two prongs. The first one refers to the means of aggregating patents, whereas the second one comprises the non-manufacturing exploitations of aggregated patents. The crossing of the two prongs of activities determines the taxonomy of patent aggregation. The redefinition and taxonomy aid future research to evaluate the effects of patent aggregation on innovation, and, therefore, its treatment under competition law.