The Output of R&D activities: Harnessing the Power of Patent Data

Paris, 29 May, 2009

'Measuring Uncertainty in the Patenting Process'

Nikolaus Thumm, Chief Economist, EPO

EPA Mission:

'As the Patent Office for Europe, we support innovation, competitiveness and economic growth across Europe through a commitment to high quality and efficient services

delivered under the European Patent Convention.'

Innovation?European Filings

0

50.000

100.000

150.000

200.000

250.000

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Total Filings 226813

Euro PCT Int. Phase

163800

EuropeanApplication

s146561

Euro PCTRegional Phase

83548

Euro DirectApplications

63013

Value of Patents

• Private Value (excl. externalities)– Inventor surveys (Scherer et al. 1999)– Financial data (Hall et al. 2004)– Patent data (renewals, citations ...)– Product/market related data

• Social Value (incl. externalities)– NPOs, EPO, WIPO, EC, nat.

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

Kum. Anteil der Patente, geordnet nach Wert

Erfa

sste

r Ges

amt-P

ortfo

liow

ert,

%

Cumulated share of patents, ordered by patent value

80%are

“irrelevant“

5% reallymatter

15% matter a

bit

Shar

e of

por

tfolio

valu

e, %

Data for about 7000 EP-patents. Source: European research project ‚PATVAL‘.

Private Value of Patents

The Concept of Uncertainty

• Applicants strategically– increase pendency time– enlarge the scope of the claims

• Results in:– More work for the office– Higher uncertainty for third parties– Consumption of considerable EPO resources

Objective: -reduction of uncertainty in the system-put dis/incentives right!

Means to extend the granting procedure

Request extension of the time limit to respond to office actions. Typically the statutory 4 month time limit can be extended by at least 2 months. Further extensions can be obtained under certain conditions.1

Request that no office action is taken. In this case a valid reason must be given, such as serious illness, death or bankruptcy.

File cascading divisional applications, provided that the parent application is still pending.

No answer to EPO communications.

No reply within the time limit and then ask for further proceedings.

Delay the filing of translations.

Delay the payment of fees.

Drop out stages by JC (1990-2000)

0%

20%

40%

60%

80%

100%

EEM HP AVM HN IC POL ELE POC COM BIO TEL MO CET VGT

Before Search Report (bsr) After Search Report (asr) Before Exam after Search report After 1st or 2nd Commun.After 3rd of more commun. After oral proceedings After Intention to grant

Uncertainty by filing practice (1)

Practice Description

1. Drafting of applications with too broad claims from the start

Applications are drafted with claims that are non-inventive and unclear. Basis is created in the description that can establish inventive step/clarity, if necessary.

2. Amendment(s) creating new deficiencies / Multiple amendments

In reply to the examiner's communication, amendments are filed that meet the objection but that create new deficiencies such as lack of clarity or new deficiencies under Art. 123(2) EPC.

The examiner has to write another communication in reply to which another amendment is filed that may give rise to yet other deficiencies (multiple amendments).

3. No constructive reaction until summoned for oral proceedings

Frequently, constructive responses, such as claim restrictions or the filing of experimental data are not submitted until oral proceedings are summoned.

4. Filing of divisionals applications with similar scope than parent

One or more divisionals are filed claiming subject-matter similar to that of the parent application. Very often, the divisional creates problems with Article 76(1) EPC (not supported entirely on parent).

Often, the parent is withdrawn before a final decision is taken (often a day before the oral proceedings for the parent).

Alternatively the parent is not withdrawn and therefore refused, and goes to the Board of Appeals. That means that the same subject matter is treated in parallel by the Board of Appeals (the refused parent) and the Examining Division (the divisional, filed before refusal).

Proceedings for the divisionals are very often delayed by the applicant.

1. EPO internal workshop (Oct 2008)

2. Economic Advisory Group (Nov 2008)

Uncertainty by filing practice (2)Practice Description

5. Auxiliary request(s) in examination and opposition proceedings

Auxiliary requests are filed in examination and opposition proceedings. The filing of auxiliary requests occurs very late, typically after summons to oral proceedings.

The number of requests is felt by examiners to be high and very often without reasoning.

The requests are very often filed by the attorney while knowing that his main request is not allowable.

6. Appeal against refusal and immediately filing of new/amended claims

First instance is not considered. Some applicants do not bring all arguments in the examination phase. They go for a straight refusal and an appeal.

At appeal, amendments are submitted for the first time.

7. Filing of a bundle of similar to overlapping applications in parallel and such that spread among many directorates

Filing of applications with similar but not identical scope or appearing to relate to different technical fields due to wording.

Frequency Effect on Office Resources

Effect on Pendency Time

Development over time

Creation of new data sample:

• sources: several EPO databases (data assembled by PD Business Services)

• all files active between 1998 and 2008 (1,529,007 files)

• detailed information on – status of application, date of filing, examination– relevant time information (filing, search,

examination, intention/decision to grant, refusal, oral proceedings etc)

– number of claims, cited X/Y documents, amendments made by applicant, communications during examination

Statistics: Direct Grants

Direct grants as percentage of total grants per year

27,1%29,7%

25,3%

33,8% 34,3%31,8%

29,5%

26,1% 26,9%

30,1%32,4%

0,0%

10,0%

20,0%

30,0%

40,0%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

EPO data

Statistics: Divisional Applications (1)

Divisional applications received at EPO

3.653

4.726

5.4666.108

6.845 7.080

0

2.000

4.000

6.000

8.000

2002 2003 2004 2005 2006 2007

EPO data

Percentage of divisional applications by joint cluster

7,4%

10,4%

2,8%

5,0%

6,6%

4,1%5,1%

4,4%3,6%

4,4%5,4%

3,6%

7,0%

3,5%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

AVM BIO CET COM ELE EST HN HP IC MO PAOC POL TEL VGT

(2007)

Statistics: Divisional Applications (2)

Statistics: Amendments (1)

0.26

0.62

0.78

1.141.18 1.19

1.221.30 1.31

0.5

11.

5A

vera

ge N

umbe

r of A

men

dmen

ts

1998 1999 2000 2001 2002 2003 2004 2005 2006

by grant yearAverage number of amendments per grant

050

100

0 1 2 3 or more 0 1 2 3 or more

1998 2006

Freq

uenc

y

Number of AmendmentsGraph s by Year of Grant

Number of Amendments per Grant

Statistics: Amendments (2)

Case study: Essential Patents with SDOs

Background: Participants in SDO's have a strong incentive to have own patents included in a standard's list of essential patents (patents that are necessary to use a specific standard)

The development of a standard within the committee is a dynamic matter, technology and standards developments carry an inherent uncertainty.

Data:

EPO dataset of all applications in IPC G/H (Physics/Electricity)active between 1998 and 2008 (583,241 files)

Database on patents declared to be essential in ETSI IPR database

Matching of information on essentiality with EPO data on claims, amendments, divisionals etc.

Comparison of "Treatment" and Control Group

Essential Patents with SDOs

Parameter: Pendency Time

0.00

0.25

0.50

0.75

1.00

0 100 200 300Duration in months

Control Group Essential Patents

(Probability of application pending at time t)

Survival Rate (Kaplan-Meier-Estimates)

Essential Patents with SDOs

Parameter: Multiple Amendments

0.8

1.6

0.5

11.

5Av

erag

e N

umbe

r of A

men

dmen

ts

Average Number of Amendments

0.05

0.13

0.0

5.1

.15

Shar

e

Share of Grants with 3 or more Amendments

for closed files in IPC G/HAmendments

Control Group Essential Patents

Essential Patents with SDOs

Parameter: Filing of Divisionals

0.03

0.09

0.0

2.0

4.0

6.0

8S

hare

for closed files in IPC G/H

Share of Divisionals

Control Group Essential Patents

Essential Patents with SDOs

Outlook

• Econometric analysis (Panel data, Survival time):– H1 probability of grant decreases with pendency time– H2 probability of grant decreases with number of

amendments– H3 probability of grant decreases with escalation of oral

proceedings– ...

• Questions:– Does pendency time differ by examiner/attorney?– How many days of delay by oral proceedings?– ...

Many thanks!

www.european-patent-office.orgNikolaus Thummnthumm@epo.org