Technological Innovation and Intellectual Property

I recently attended the European Patent Conference where I heard many interesting presentations about new research and also heard about plans to establish a single European Patent Court. This raises some interesting policy questions and the experience in the US with a single appellate court may be informative (e.g., see John Duffy’s presentation at the conference).

One question raised is this:
How often do European inventors enforce their patents first in the US instead of in Europe?

We know that:

1. The most valuable inventions are patented in multiple major markets.
2. Deep-pocketed multinational firms often make the best targets for patent suits.
3. If US courts are more favorable to patentees than European courts, European inventors may find it advantageous to bring suit in the US, aiming to achieve a worldwide settlement agreement.

In other words, the European inventors with the most valuable inventions may “forum shop.”
The raw numbers on patent lawsuit filings provide some credence to this hypothesis. Using Derwent data (and adjusting for undercounting), I find that European inventors file over 200 lawsuits in the US each year in recent years. The CJA study found that among European countries, the total number of lawsuits filed each year is larger than this only in Germany (about 500) and this includes suits filed by non-European inventors. The UK only has about 120 suits per year and France only about 80.
More research is needed, of course, but this suggests a few things:

1. We live in an increasingly global patent system, especially for the most valuable patents.
2. The large multinationals who are pushing for the European Patent Court may be more concerned about the substance of European patent law rather than the need for a single forum–they already have that and it is in the US.
3. There may be something of a “race to the bottom.” National patent systems may have incentives to offer the most favorable treatment to inventors, at the expense of patent quality.

–Jim Bessen