Mr Dietmar Harhoff's Views Of The Patent System

When Mr Harhoff started presenting his slides, I noticed the big conference room 102 in the Isar building of EPO filled with audience somewhat under average for such sort of GRUR events. When presentations are announced e.g. concerning particular developments in patent case law, patent practitioners tend to appear in droves, filling the room until it is packed with attendees. In this case, however, the title comprising the word "Innovation" in conjunction with "Patent Protection" apparently helped to deter many of Munich based patent attorneys. Maybe the fruits of listening to presentations like that of Mr. Harhoff can't easily be utilised during billable work for clients. Anyway, the presentation as well as the matter at stake would have deserved a larger audience.

In fact, things might appear different if it is taken into account that Mr Harhoff surely is one of today's most influencal advisors in the field of patent politics from Academia throughout the EU. In particular Mr Harhoff had, on the morning of that very day of his giving a presentation for GRUR, another appointment in Brussels for discussing Economic Cost-Benefit Analysis of a Unified and Integrated European Litigation System with the EU Working Group on Patents. Nevertheless, he made it to reach Munich in due time.

Mr. Harhoff has also a background as a mechanical engineer and can surely be seen as a pragmatist not sharing some of the resentment against IP in general some other academic economists appear to have. Nevertheless, the message given by Mr Harhoff was not much suited in all of its parts to please the patent practitioners present in the audience:

• The complexity of the patent system is rising; the diversity of strategical options for the players is ever increasing.
• Increasingly Patent Offices suffer from quality problems
• The number of court cases concerning competition law with involvement of IP will rise
• More patents do not under all circumstances mean more innovation
• Tendencies towards a "generous" practice of granting patents at EPO must be curbed
• A harmonisation of the various patent systems on a lower quality level of U.S. patent examination must be vetoed resolutely.

In order to achieve this, Mr Harhoff recommends:

• Raising the bar
• Modifying fee structures in order to sanction opportunistic behaviour
• Avoiding any steps to lower the costs for patent protection in general but introducing a Small Entity status for SMEs
• Avoiding subsidising patent examination by renewal fees
• Creating incentives for patent examiners to work in a way enhancing patent quality
• Making opposition procedures more attractive
• Subjecting enforcement of patents to competition regulation in certain cases

Patent Activity Index [(C) 2009 D. Harhoff]

In my own words, Mr Harhoff in particular sees certain scaling and complexity problems due to the extraordinary volume of patent applications now filed year by year, and he surely wants to see the patent system more scaled down with less complexity than further scaled up.exposing increasing complexity.

Divisionals filed with EPO [(C) 2009 D. Harhoff]

One of the various points he discussed was the rate of divisionals filed with EPO. He provided some very impressive statistics on this matter adjusted to reflect the year of filing the divisional application. He sees the opportunity readily available at applicant's hands to have a fresh start by filing a divisional application as one of the sources of overload and over-complexity. Obviously, pushed by his advice, future legislative measures might well be mooted in various political circles to curb this tendency.

With regard to patent examiner incentives, he mentioned that some time ago the EPO have changed their internal system such that rejecting a patent application gives examiners more points than just rubber-stamping a Decision to Grant.

The allowance rate - as long as it can be measured adjusted by year of filing during the interval from 1978 to ca.1996 - hasn't changed much and stayed around sixty-something percent but time will tell as to how this is about to change now.

The Q&A session after Harhoff's presentation saw some ruminative contributions from industry as well as from the free profession, in their majority not generally challenging Mr Harhoff's recommendations but rather supplementing them. For example, the factual infeasibility of doing proper product clearings as a result of today's scaling and complexity problems of the patent system were mentioned by representatives from the industry.

Some critics come up concerning Mr Harhoff's proposal to change current subsidising patent examination by high patent renewal fees because of these fees strongly foster thinning out the patent register with regard to patents well advanced in years.

Bottom line, the event has made clear that it is much likely that not only there is some temporarily recession as a consequence of the current global economic trouble which will dampen patent activity for some time but, from a medium to long term perspective, the patent system probably will undergo deeper structural changes limiting the expectations for an ever growing patent business considerably. Defending and arguing to expand the patent system will more and more become an uphill struggle for all stakeholders concerned.