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Sunday, September 16, 2007

U.S.: Mr Mark A. Lemley and Mr Nathan Myhrvold Suggest Mandatory Publication of Patent Assignment and License Terms.

From

a paper titled "How to Make a Patent Market" by Mr Mark A. Lemley and Mr Nathan Myhrvold:

"[...] Willing licensors and licensees can't find each other. Patent auctions often fizzle, because without a thick market - one with an array of buyers and sellers bidding on price - no one can know whether they are getting a steal or being had. When parties do license patents, the prices are (to the extent we can tell) all over the map. And the rest of the world has no idea what those prices are. This in turn means that courts lack adequate benchmarks to determine a 'reasonable royalty' when companies infringe patents. The lack of a real, rational market for patent licenses encourages companies to ignore patent rights altogether, because they can't make any reasonable forecast of what it would cost them to obtain the licenses they need and because they fear that they will pay too much for a technology their competitors ignore or get on the cheap. At the same time, ignorance of prices permits unscrupulous patent owners to 'hold up' companies that make products by demanding a high royalty from a jury that has no way of knowing what the patent is actually worth.

The solution is straightforward: require publication of patent assignment and license terms. Doing so won't magically make the market for patents work like a stock exchange; there will still be significant uncertainty about whether a patent is valid and what it covers. But it will permit the aggregate record of what companies pay for rights to signal what particular patents are worth and how strong they are, just as derivative financial instruments allow markets to evaluate and price other forms of risk. It will help rationalize patent transactions, turning them from secret, one-off negotiations into a real, working market for patents. And by making it clear to courts and the world at large what the normal price is for patent rights, it will make it that much harder for a few unscrupulous patent owners to hold up legitimate innovators, and for established companies to systematically infringe the rights of others. [...]"

Mr Mark Lemley is the William H. Neukom Professor at Stanford Law School and a patent litigator at Keker & Van Nest.

Mr Nathan Myhrvold is CEO of

Intellectual Ventures, former CTO of Microsoft, and founder of Microsoft Research.

With regard to EPO and the German Patent and Trade Mark Office, the mere fact of a patent assignment as well as the parties involved already get published.

Concerning some further aspects of Intellectual Ventures' IP portfolio strategy, see e.g. a

posting made by Mr Joff Wild on his IAM Blog.

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