It’s Time to Fix the Global Patent System Before It Breaks Under the Weight of New Applications

By Mark Schultz & Kevin Madigan
October 24, 2016

Global fractureWhat’s the biggest challenge for the patent system in many countries? It may not be what you think. While issues with litigation or patentable subject matter often come to mind first, in many countries, including some of the world’s most important emerging economies, it takes so long to get patents that they approach irrelevance in many industries.

The Center for the Protection of Intellectual Property (CPIP) has just released a report entitled The Long Wait for Innovation: The Global Patent Pendency Problem. For the first time, this report documents a growing global problem of patent backlogs, which has long been the subject of anecdotal complaints. CPIP is affiliated with the Antonin Scalia Law School at George Mason University.

We found that in many countries, processing times are eating up much of the 20-year lifespan of patents. Here are some of the report’s more compelling findings:

  • There were few countries in our sample where average time to grant would be considered “quick” by anyone’s standards. For example, in 2015, average time from application to grant ranged from Korea, at 2.8 years, to Brazil at 11.4 years. The U.S. ranked third in the sample at 3.2 years, which appears to be a very positive result relative to the rest of the group. However, this outcome likely says more about just how much of a problem pendency is everywhere, since pendency times in the U.S. are often criticized.
  • It now takes over 14 years on average to get a patent for mobile technology in Brazil. Brazil is only now getting around to granting patents from the days of flip-phones and the infancy of 3G!
  • In Thailand, it takes more than 16 years on average to get a life sciences patent. In fact, Thailand regularly issues patents with mere months or weeks of life left before expiration.

What’s happening? Simply put, patent offices are failing to keep up with the growth of the innovation economy and the resulting increase in patent applications. Unfortunately, the problem could easily get worse in coming years. Many patent offices apparently have yet to process applications from recent years, when huge increases in applications have occurred.

It’s a problem that threatens to undermine the global patent system, but what’s both encouraging and discouraging by turns is that it’s largely a basic problem of good governance. Many of the solutions to the problem are relatively straightforward. They require the application of sufficient resources and a willingness to hire an appropriate number of examiners and share work between patent offices. These solutions are a matter of political will and effective management, rather than complex policy. Some countries have shown the will to turn things around, and we hope others will follow.

A Portrait of Delay

In April of 2001, Microsoft filed a patent in Brazil for its ClearType technology, which helped smooth text that appeared pixelated on a computer screen. The technology was incorporated into the Windows XP operating system released that same year, and Microsoft applied for patents on the technology in many different countries. But while patents for the technology were granted by the U.S. and other countries by early 2002, the prosecution of the application in Brazil stalled. Years passed, and as ClearType was utilized in many later versions of Windows and other Microsoft products, the Brazilian application sat pending. In 2012, Microsoft began de-emphasizing the technology in their releases, and by the time Microsoft Word was released in 2013, the product did not use ClearType at all. The following year, in 2014, thirteen years after filing the initial application, Microsoft was granted its Brazilian patent for ClearType.

Such stories motivated us to do the study. We were surprised to find that the appalling anecdotes we heard about lengthy delays more often represented typical, average examples than exceptions.

In other words, the plight of Microsoft in Brazil isn’t an isolated occurrence. Some countries routinely take ten years or more to process and grant applications for certain technologies, and once the applications are finally granted, they are left with negligible patent terms. For example, in 2015, Thailand issued 16 patents with less than a year of term left after the applications were pending for nearly 20 years, and, in 2014, Thailand granted some patents with mere days remaining on their lifespan. In the face of such delays, many of today’s most contentious debates about the finer points of the patent system seem almost irrelevant. When delays are so extreme, they effectively deprive patents of most of their value and force.

A Global Overview of the Pendency Problem

Our study investigated the average time that it takes to get a patent granted in a sample of 11 countries. Our sample included a diverse set of jurisdictions, including long-established patent offices such as the US, Japan, and the EPO, emerging powerhouses such as China and Korea, and developing patent systems such as India, Brazil, Argentina, and Thailand. We rounded out the survey with Australia and Egypt.

We see this report as the beginning of a conversation and a research agenda regarding patent backlogs. As we observe in our report, this issue has been understudied. There has been work done by the USPTO and the UKIPO, as well as WIPO, and some of the more developed jurisdictions publish data. However, data is scarcer and more challenging to obtain than one might hope, thus we chose to focus on a sample of 11 countries and the statistic of average time to grant. We hope that countries will begin to keep and publish more detailed data as they start to tackle the problem.

To provide a general overview, Figure 1 shows the average time to grant over the eight-year span from 2008 through 2015, which was the period for which most data was available.

Figure 1: Average Granted Application Age for Selected Countries 2008 - 2015 (in years)

Figure 1: Average Granted Application Age for Selected Countries
2008 – 2015 (in years)

 

The overview represented in the summary graph yields the following key insights:

  • Neither national wealth, nor relative lack of it, determines how quickly a country’s patent office can process applications. As the figure indicates, national wealth (as measured in terms of GDP per capital or absolutely) does not correspond to average grant times. Though the United States is the wealthiest country in the sample, it was the third fastest in average time to grant, and more remarkably, Japan and the EPO rank in the middle of the sample, by over two years. It’s also important to note the major disparity among emerging markets of China, India, and Brazil with average pendencies of 2.9, 6.3 and 10.1, respectively.
  • It takes a really long time to get a patent in Thailand and Brazil. While it is obvious at a glance, one fact nevertheless cries out for comment: It takes a really long time, on average, to get a patent in Thailand and Brazil – over ten years. One could question whether faster is always better, since doing a job fast does not necessarily mean one is doing it well. But quantity has a quality all its own, and ten years – half the term of a patent – is inarguably a long time. In absolute terms, ten years is a long time in the life of an individual inventor, let alone a business or a cutting edge technology. Waiting ten years to see how a patent application turns out is simply not going to be practical or helpful for most inventors, businesses, and technology investors.
  • New leaders in patented innovation appear to be emerging. Many have begun to note that certain rising nations, including China and Korea, are embracing the opportunities presented by patented innovation. As Prof. Jonathan Barnett observed in a recent paper sponsored by CPIP, emerging “patent tigers” have embraced patenting as a way to develop their innovation economies. China and the Republic of Korea show as leaders in the survey, at the very least processing patent applications efficiently. While time to grant is only one metric of a patent office’s effectiveness, it does indicate a commitment to patented innovation.

Global Trends by Industry

We then broke out some important fields of technology and looked at average times to grant for each. To avoid overwhelming detail, we aggregated a few key groups of technology fields into more informative industry categories.

Mobile Technology. Given the importance of the revolution in mobile technology, we collected data on pendency times for patent applications in the industry classification most relevant to mobile technology: audio-visual technology, digital communications, and telecommunications.

Figure 2: Mobile Technology Average Age of Granted Patents (Years) 2011 – 2015

Figure 2: Mobile Technology Average Age of Granted Patents (Years) 2011 – 2015

  

Life Sciences. Anecdotally, patent applications in the life sciences sector are said to experience tremendous delays. To determine how such applications faired in both absolute and relative terms, we gathered data on: biotechnology, medical technology, and pharmaceuticals.

ms-oct-2016-3

Our review of global trends by industry regarding average patent grant times reveals three key insights:

  • The issue of lengthy pendency times for patent applications is not confined to cutting edge industries. Slow processing appears to be an issue that is consistent across a patent office’s operations, rather than confined only to “difficult” fields.
  • Lengthy pendency is an issue for both the high tech and life sciences industries. Both mobile technology and the life sciences suffer from high average pendency periods in Brazil, Thailand, and other countries. This finding indicates a problem with resources across the board, rather than with shortages of particular types of expertise or oddities with respect to certain types of applications.
  • In many industries, some countries’ average wait times render patents largely futile. In some countries, applicants in some fields must, on average, burn through more than half the length of a patent term. Given the pace of advancement and obsolescence in some industries, much or all of the truly useful life of a patent is spent waiting for a grant. Multinational companies and other large businesses may have the resources to sustain momentum over such long waiting periods, but individuals and small and medium enterprises lack the resources and time to wait. Long wait times for patents almost certainly hurt local entrepreneurs the most.

Fixing the Problem

Our report suggests several solutions to the problem. None of them are terribly novel or complex; all of them require serious dedication to fixing the problem. Thus we suggest:

Hiring more and better-qualified examiners. Many countries’ patent offices remain desperately under-staffed.

Implementing work-sharing between patent offices. A lot of duplicative work is being done in the global patent system. Sharing work is a matter of efficiency, even while actual examination and policy decisions can remain in local hands.

Eliminating Obstacles to Final Grants. Some countries institute pre-grant oppositions and other duplicative review procedures prior to grant. If countries were serious about eliminating delay, they would cut these reviews, particularly since in most cases they duplicate post-grant reviews, giving competitors multiple bites at the apple.

Conclusion

Nations’ economic strength and progress depend on protecting investments in innovation and creativity. An efficient and capable patent office is a crucial element in guaranteeing these protections. The results of our study show that things are not going well in key parts of the global patent system.

It’s time for a serious global conversation about patent delay. Let’s recognize that a broken, incompetent patent system is in no one’s interest. We need more transparency and data. Solving the problem requires facing up to the statistics we report here while starting to collect and report on patent office performance universally. More than anything, however, patent offices should start implementing basic solutions.

While the design of the patent system raises essential policy issues, the day-to-day work of examining patents is a relatively mundane, technical process. The reluctance of some to share work and information indicates misplaced concerns about sovereignty and policy flexibility. Inefficient patent examination furthers no policy goals but causes much harm. Patent examination should be done well as a simple matter of good governance.

We hope that our report helps spark further conversation and efforts on this fundamental issue.

The Author

Mark Schultz

Mark Schultz is a Senior Scholar and Director of Academic Programs at the Center for the Protection of Intellectual Property (CPIP). He also serves as an Associate Professor of Law and Director of Faculty Development at Southern Illinois University. Professor Schultz writes and speaks frequently around the world about the importance of legal institutions that support the creative and innovative industries.

Mark Schultz

Kevin Madigan is Research Fellow at the Center for the Protection of Intellectual Property (CPIP) at George Mason University School of Law. Kevin works closely with CPIP scholars in their research and promotion of comprehensive intellectual property law and policy. He writes about current IP issues at his mistercopyright.org. For more information and to contact Kevin please visit his profile page at CPIP.

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Discuss this

There are currently 6 Comments comments.

  1. EP=EPR October 24, 2016 10:39 am

    For your China and SK statistics do your averages include “utility model” patents? Since these have very low examination thresholds and are quicker to grant this may be artificially lowering the average as compared to US.

  2. Ron Katznelson October 24, 2016 2:56 pm

    Mark and Kevin,
    Excellent and timely article! I hope to promptly post a follow-on article here on the real cause of long pendencies: the 18-months publication rule for pending patent applications. Stay tuned.

  3. Bernie Greenspan October 24, 2016 3:32 pm

    Thank you for reporting on this. It would be interesting to know if provisional rights exist in any of the medium and high pendency countries. If enforceable, they might serve as some kind of deterrent during the pendency.

  4. Anon October 24, 2016 4:27 pm

    I suspect that Ron K’s article may touch upon the notion that since the previous standard Quid Pro Quo has been decimated by the 18 month publication rule (why bother hurrying, since the Office already “gets” its side of the deal with publication).

    Just a hunch – I could be off.

    (I would simply note in passing that many of the same crowd who can be called “efficient infringers” are also ones clamoring for nigh-instant publication upon filing.)

  5. Jian Li October 25, 2016 2:06 am

    I guess the CN statistics do not include “utility model” patents. We can take the average grant time in life science as a “purified” sample without the noise from utility model patents since few utility model patent applicaiton are filed in this field. And the 3-year average grant time in life science is quite close to the overall average grant time.

  6. Mark Summerfield November 20, 2016 7:04 am

    Thanks for this article – interesting work, which prompted me to look a bit more closely at the data. Some of the effects you observe are due to factors other than resourcing and efficiency in the various patent offices. Nonetheless, you are absolutely right that there are some patent offices that are in serious trouble.

    Here’s my latest article on the subject: Patent Offices in Crisis? Application Pendency Alone Does Not Tell the Full Story.