How will the global IP system be affected by the current ...

At LinkedIn.com, there is a facility to ask questions to the audience of the network membership, and I decided to raise therein an issue as follows:

What will most likely be the impact of the current financial and stockmarket crisis on the patent business and on the patent system in its entirety?

I'm interested to get your views on possible effects of the current crisis of the international banking system as well as of the stockmarket downturn on:

• the application/prosecution of patents,
• maintaining of existing patents,
• licensing of patents, and
• political appraisal of the patent system in its entirety

Up to now, I got six answers, and all of them appear to be very interesting.Those who have password access to Linkedin.com can view the answers together with personal data concerning the identity of the respondents here.

Concerning the first point of the impact on patent applications and/or prosecution, one of the answers clearly stated that the companies are likely to spend less on R&D in order to cut cost. And, in consequence, it will result in less number of applications for grant of patents, the respondent argued. Further in order to save cost the companies will not indulge in frivolous claims of new invention. However, another network member took a quite opposite view by arguing that as the economic climate turns south IP protection turns north. He thinks we will see more protection of patents and trademarks as a means to lockout competition to ensure a larger market share. This point of view was seconded by a respondent who argued that among some of his clients - especially among relatively larger clients where managers have some familiarity with the patent process - when production slows down for economic reasons, engineers who have been pulled off of R&D to troubleshoot production problems can return to R&D, leading to more innovation/inventions/patent applications. But he also confirmed that we are also seeing a trend toward more selectivity with respect to maintaining existing patents, and that was before the current financial and stock market crisis. He does not see any reason why that trend should not continue as money becomes even tighter. In a third line of arguing, another respondent wrote that these kind of crises are on the long term of no effect; if patents are core value to the company, no budgeting restriction will occur but for cosmetic reasons. Only if patents are no core value to the company, an effect may be noticeable in small entities.

The overall picture appears to be somewhat complex. Obviously any useful answer is likely to be dependent on the specific branch of the industry which is considered. I strongly believe that some companies surely will reduce their R&D efforts and, hence, will file less patent applications; however, there might well be areas where other effects will prevail.

Concerning the last point related to the political landscape, a U.S. Patent Attorney wrote that all he cares to say is that here in the United States, it is certainly a turbulent, challenging time to be a patent attorney, for reasons that are entirely unrelated to the current financial and stock market crisis. This is seconded by another respondent, a lawyer from India, arguing that politics is one of the most unpredictable social phenomena but basic tenants of IP will not change. In his view, only the procedural modification may take place. In any case the changes if any will not be cosmetic they are going to affect market. The change may come in form of reduction in number of years of propriety right, filing procedure, single registry all over the world or less stringent requirement for compulsory licensing. Whatever may be the case the overall system of IP is likey to be affected in negative way.

(Photo: (C) matze_ott via Flickr licensed under Creative Commons)