The Role of Patent Offices and Partner Institutions in Development of Markets for Technology – What Can Europe Learn from Japan?

Abstract

In Europe, a little over 1/10th of all European patents are licensed and over 1/3rd of patents are not used (PatVal, 2005). This suggests there is much room for growth in the markets for technology. It appears that this issue could be partly addressed by encouraging a market for unused or underutilized patents. Designing such structures with the help of the patent office and Patent Office Partner Institutions (POPI) is the focus of this paper. Traditionally, national intellectual property offices have not been part of innovation policy or SME policy initiatives of a country (OECD, 2004). However, global developments and pressing economic needs can contribute to shifts in attitude. Some patent offices are beginning to provide services that allow access to the IP system and utilization of IP benefits to entrepreneurs and SMEs (OECD, 2004). These include JPO and IPOS. Starting in 1997, JPO has been involved in licensing promotion aimed at creating new ventures and building a technology market (JPO, 2001). The activities involved creating a licensing database, educating about licensing and sending patent licensing advisors to firms. These activities are administered by NCIPI, which was once part of JPO (JPO, 2001). In March 2008, a total of 10,672 contracts have been concluded, 1,416 transactions in 2007 alone (JPO, 2008). The design and the results of the JPO and INPIT relationship suggests that patent offices can be successfully involved in pioneering and catalyzing the development of markets for technology for SMEs and new ventures. A comprehensive design involving human capital support, such as licensing advisors along with a complementary online licensing database with business application examples would be a big step forward in promoting the use of patents in Europe. However, even one of these initiatives at the EPO or EU level would bring additional economic benefits that are not trivial. In Japan transactions facilitated by licensing advisors alone generated 267 billion yen in 10 years (JPO, 2008). Designing a patent market should put an emphasis on investors who can provide multiplier effects on returns to innovation and patenting (Kortum and Lerner, 2000), and most interested licensees. It would allow investors, such as VCs, to find patents that complement their existing firm portfolios with relevant technologies and companies to bid for licenses on the patents that could supplement their technology. It would seem appropriate to enable VCs to review patents in a structured market that takes advantage of competitors’ interests, such as the opposition at the EPO. Based on academic quality and relevance of topic, this paper has been selected for inclusion in the 2010/11 Munich Intellectual Property Law Center (MIPLC) Master Thesis Series.