A study of Patent Thickets (1.31Mb) - UK Intellectual Property Office

8 A Study of Patent Thickets
While there is a large and growing academic literature on patent thickets (which we survey
below) much remains to be learned about the origins and especially the effects of patent
thickets. One important question, which is addressed in this study, is the effect of patent thickets
on the ability of small and medium sized enterprises to use the patent system in order to protect
their inventions or to enter markets with complex products. There is little work on this question
to date. 1 This is because patent thickets are a complex phenomenon and the existing literature
has focused on determining the factors that contribute to this phenomenon and the empirical
measurement of thickets, and much less on their economic impact.
Next, we briefly review the factors that contribute to the growth of patent thickets and the
challenge of evaluating the economic effects of patent thickets. Some of these factors are
specific to the United States, where patent thickets were first identified in the patent system.
However, the importance of the US economy, especially as a market for high-technology firms
from around the globe, has meant that patenting strategies of corporations from outside the
United States have adapted to strategies used initially by US corporations. Where factors
contributing to changing patenting behavior are specific to the United States, we point this out
below and in the literature review. Whenever possible, we specifically discuss empirical evidence
available on the UK.
The current economic and legal literature has identified the following factors as contributing to
the growth of patent thickets:
1. The strengthening of patent rights with the creation of the CAFC in the United States in
1984, the broadening of patentable subject matter and an increased tendency to resolve
patent disputes using injunctions in some jurisdictions;
2. The cumulative nature of science and by extension of technology and as a result a shift
towards complexity in many technologies;
3. Shifts in the degree of technological opportunity in various key technologies;
4. Strategic patenting by corporations and the assertion of patents by Patent Assertion
Entities (PAEs);
5. Lack of resources and misaligned incentives at patent offices dealing with a flood of
patent applications that resulted from the aforementioned factors;
6. Growth in trade of high technology products, leading to an increase in demand for
patents by foreign firms and to the spread of patenting trends from Japan and the United
States to other jurisdictions.
These factors have independent origins; nonetheless they interact to strengthen incentives for
firms in some sectors to acquire as many patents as possible. For instance, incentives at the
European Patent Office (EPO) appear to have made it cheaper in some complex technologies
to acquire additional patents, than to oppose a rival’s weak patent that might be used to limit
1 The recent report by the FTC (2011) specifically considers the role of small and medium sized enterprises in the
market for technology in Chapter 1.