The role of patents for the digital single market

On March, 17th 2015 Liina Tonisson and me joined a one-day conference on the role of patents for the digital single market which was organized by the Institute for Prospective Technological Studies of the Joint Research Center (JRC, European Commission). The topic of the conference is in-line with the current discussions around Europe’s Digital Agenda. For research and innovation, the agenda claims the goal of “scaling-up the ICT innovation ecosystem in Europe. The Commission works to improve innovation in Europe by providing instruments that enhance research, entrepreneurs and companies.” ICT standardisation is emphasized as an important framework condition for innovation in Europe. Obviously, patents are right in the middle of that discussion. The list of the around 150 participants at the conference revealed a broad spectrum of organisations interested in that topic. The European Commission attended with a significant number of participants from different DGs, but the academia, industry and interests groups were well represented.

Figure 1 Stuart Graham from Georgia Institute of Technology is opening the session on patenting and digital market, the impact on innovation, growth and employment. The panellists are (from left to right) Rebekka Porath (Intel), Salvatore Torrisi (Bologna University), Mariagrazia Squicciarini (OECD), Grant Philpott (EPO), Patrick Hofkens (Ericsson), Nathan Wajsman (OHIM)

In the first session, the general role of patents for the European Commission’s vision of a Digital Single market was discussed. The session was chaired by Kerstin Jorna from the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROWTH). In this session our colleague Knut Blind (Fraunhofer FOKUS, TU Berlin) started with the topic of standardization – one of the red threads for the whole day. He argues that ICT is largely driven by standardization, not only at the technical layer of architecture, but also on the more content-oriented layers. According to Knut Blind, the discussion around the importance of patents for the digital single market is closely tied to the question of standard essential patents and the fair access to these technologies. Dietmar Harhoff from Max-Planck underlined this view, and argued that this topic is strongly related to the question of patent aggregation and the need of well-functioning markets for accessing the technology. He presented preliminary results of an expert workshop on “Patent aggregation and its impact on competition and innovation policy” in November 2014 at EPO, to which our group contributed as well.

In the second session the impact of patenting in the digital markets on innovation, growth and employment was discussed, nicely chaired by Stuart Graham, the former chief economist of the USPTO. Within this session Nathan Wajsman, the chief economist of the Office for Harmonization in the Internal Market (OHIM), highlighted the importance of IPR-intensive industries for the economic success in Europe. His contribution helped to widen the discussion and to see patents as an essential, but not decoupled part of the IPR-environment of a digital single market. The highlight of the session was Mariagarzia Squicciarini’s (OECD) release of a new joint study of EC and OECD on Innovation and IP bundles. In a large-scale empirical study, they investigated the collateral importance of patent and trademark portfolios of innovators in different industries. Their findings support the initial argument of Nathan Wajsman that the economic impact of patents relies on the IP-environments in which they are embedded.

The third session, which was chaired by Nikolaus Thumm, chief economist of the EPO, was the most controversial topic of the day. It discussed the question of software patents, or more formally, on computer implemented inventions (CII). In a first introduction Clara Neppel from the EPO explained to which extend software is patentable within the EPO policies – which is today possible, but only under strict conditions. Our colleague Rainer Frietsch from Fraunhofer ISI presented a study on CII patents they conducted, sponsored by the Technology, Innovation and Investment Council. (The TIIC is an interest group which was, according to their website, set up in 2013 by four innovation-driven companies with the desire to proactively advocate a healthy investment environment for technology.) Within the study they claim that 35% of the inventions at EPO can be considered as CII, whereby 78% of the CII patents at the EPO are filed by applicants from the manufacturing industry. According to the interviews done by them, a majority (68%) of survey respondents want to maintain the status quo for patent protection on CII. Mirko Boehm from the Open Invention Network (OIN) presented the perspective of the Open Source Community. (According to their website the OIN is a defensive patent pool and community of patent non-aggression which enables freedom of action in Linux.) He discussed five significant challenges the OIN sees at the intersection of collaborative software development and the patent system. Interestingly he summarizes with the following statement: “In the collaborative space, IP is shared. In the competitive space, patent quality is the issue.” The last presentation by Nicolas Schifano, from Microsoft, showed that the question of patent quality seems to be the key to a compromise in the CII domain. Because the bottom line of his presentation was quite similar: patent quality is important for the benefit and usability of CII patents, even for companies like Microsoft.

The last session discussed in detail the importance of standards and patenting for the digital single market. The session was chaired by Tony Clayton from the UK-IPO. Yann Ménière from the École des Mines discussed the current state and the challenges of FRAND access to standard essential patent portfolios. He summarises that FRAND is about sharing value and reducing negotiation costs. Robert Dini, the CEO of Sisvel, emphasized the importance of patent pooling for establishing access to standard essential patents – not surprisingly, because patent pooling is the business model of Sisvel. Unfortunately the contributions of this session left a bit behind the potential of the topic within the context of the Digital Single Market.

In the closing remarks Lucio Picci from Bologna University claimed the urgency for more research on the patent-related topics. As an important step for changing this situation he sketched the idea of a European Research Infrastructure on which Scholars can share and discuss patenting-related data – an idea which I strongly support. Guido von Scheffer (TIIC) emphasized in his closing words the importance of interoperability (and therefore standards) for the success of the Digital Single Market. He argues that patents are means for extracting ROIs from the participation in standardization efforts – a necessary precondition for fostering interoperability and innovation towards the single market.

Conference Website: https://ec.europa.eu/jrc/en/event/conference/european-digital-single-market-role-patents