Patent Notice (Failure) in the Era of Patent Monetization

Abstract

AbstractThe most commonly provided economic rationale underlying the patent system is that it incentivizes inventive effort that may not be carried out in its absence. In addition to this utilitarian rationale, economic and legal scholars frequently refer to a second rationale: the dissemination of technological information to the public. This notice function is thought of as an important mechanism to enable a more efficient investment in innovation by stimulating further (cumulative) innovation, reducing wasteful duplicate innovative efforts, and limiting unnecessary litigation. Courts have placed a great deal of emphasis on the notice function and have described it as the quid pro quo of granting patent owners the right to exclude. Whereas the notice function is traditionally confined to the adequate disclosure of inventions, we propose that in light of the recent trend towards rapidly growing markets for patent monetization it should also encompass the adequate disclosure of holders of patent rights. Specifically, we argue that knowing the identity of rightsholders is a fundamental prerequisite for any patent transaction to occur. Based on a comparative analysis of the provisions of six patent offices, we illustrate that even though current provisions warrant an adequate disclosure of the identity of initial patent applicants, they provide the public with only limited opportunities to track subsequent changes of ownership. Whilst most patent authorities require to file notice when patent rights are assigned, strict enforcement mechanisms are absent. This allows for a lack of transparency of patent ownership, which may hamper rather than facilitate technology transactions.