Patent injustice for small software companies
Published: 29 Jun 2005 18:15 BST
The majority of SMEs struggle to file more than one patent, according to the Colorado College study. Of the SMEs granted patents by the European Patent Office, 81 percent had only been granted a single patent over six years. The report also showed that less than one percent of SMEs had filed 10 or more patents.
Larger companies, which have larger human and capital resources, are generally able to fully take advantage of the patent system and often file hundreds of patents over the course of a year. For example, Microsoft, SAP and IBM have had 225, 142 and 106 patents published respectively by the European Patent Office this year.
International patents
Small companies also often have to make difficult decisions about which country to file patent in — more countries equals more cost. Unisto, a Swiss-based company that produces security seals for retail and manufacturing, has only taken out its patents in a few countries, as it is too costly to file the patents worldwide.
"We thought about filing the patent in China as it's an emerging market. But then we thought, 'Will somebody copy this product and make it in China? Am I ever going to defend it in China? How much will it cost me to file it in China?' Eventually we said we'll write it off," says Unisto sales and marketing director Mark Hayward. "I would like it the patent system to be cheaper in the early days to secure patents in more countries for less money."
Again, costs are less of a factor for large multinationals that often are able to fire off as many patents in as many countries as they please. "The reason multinationals have a greater number of patents is probably due to the fact that they have full time patent departments. I worked in a patent department of a multinational pharmaceutical company when I was younger, and it was routine to file a patent in every country which had a patent system," said an anonymous former insider.
Spreading patent confusion
Larger companies clearly have an advantage when it comes to the geographic spread of patents but they also have a further advantage in the type of patents they can produce. Large companies have the financial muscle to invest in filing what are best described as trivial patents. On the whole, these kinds of patents are not protecting any current intellectual capital but may allow that company to tie up or benefit from a future competitor's innovation.
According to a software manager at a small technology company, multinationals are swamping patent offices with well-worded patent applications for currently trivial technologies in the knowledge that a certain proportion of them will be passed and may pay off in the future.
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