Ambercite was honoured to be invited to present on NPA at the Patent Statistics, Innovation management and IPR Conference in Paris, held on the 5th of June 2012. I presented Network Patent Analysis and foreshadowed our upcoming new products for the first time to a European audience.
The conference also included a number of presentations on the role of patents in the ICT space. Jim Bessen from the Boston University School of Law in his presentation Patents and Possible failures in the Digital World argued the net effects of patents in the ICT space was negative, as the value destroyed due to the effects of patents was greater than the value created through higher profits. Simon Forge from SCF Associates in his presentation "The Tragedy of the Patent" argued that Europe had an opportunity to steal a march on US companies due to the exclusion of business method and software patents in Europe.
The counterview was provided by Claudia Tapia Garcia from RIM, Monica Magnusson from Ericsson, and George Whitten from Qualcomm, including in a panel discussion. Perhaps the most thought provoking of these presentations was a presentation from Monica Magnusson and about how the 3G Partnership Project (3G for the rest of us) mobile broadband standard works. A series of working committees decide areas of improvement for 3G, and the various companies working in this area are invited to develop competing solutions. The engineers on these working committees then evaluate these solutions , and pick a winner based on technical merit, and make this solution part of the now revised standard. Successful vendors are required to make their solution available to all comers on the now almost infamous Friendly, Reasonable And Non Discriminatory (FRAND) conditions, and one suspects that peer pressure helps to ensure that licenses are indeed FRAND.
The role of patents in this process is provide participants with a currency for exchange during these negotiations, and means of ensuring that the successful developers are rewarded for their effort, and not surprisingly Qualcomm, Ericsson and RIM all defended that patent system for this reason. In their view, the current increase in patent litigation in the ICT space, and complaints about 'patent trolling', are all a healthy and to-be-expected outcome from the patent system.
Regardless, one of the representatives of the above companies then admitted in discussions afterwards that their company does sued on a regular basis by other patent holders, but prefers to deal with such assertions by defending itself in courts where it has been quite successful, and was starting to build up a reputation for being so. This representative's key observation was that there are many patents of dubious quality out there, and this may be part of the cause of the recent trend in litigation.
And there may be a lot of truth in this. Allison, Lemley and Walker have shown that only 9.2% of patents asserted by Non Practicing Entities (NPE) eventually win their cases in US courts. This is lower than the 46% figure commonly quoted for all US patent litigation (and dating from 1998, and so which may be out of date). However the recent litigation between the Practicing Entities Apple and Google has seen just 5 out of the 21 patents (a little under 25%) originally asserted survive review by the Judge Posner.
The reason for some of these high patent invalidity rates may due to the difficulty of searching for prior art patents during their initial examination. Current patent searching practices do have significant limitations (including having to read through long lists of patents to find the patents you might be looking for), and this has encouraged Ambercite to apply its Network Patent Analysis principles to develop a new method to improve patent searching. The results of this development are being finalized at the moment, and we look forward to demonstrating this in due course.