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UNESCO SCIENCE REPORT Box 5.3: The rise (and fall?) of patent trolls ‘Patent troll’ is a term used widely to designate firms that are formally called patent assertion entities. These firms make no products but rather focus on buying dormant patents from other firms, often at a low price. Ideally, the patent they purchase is broad and vague. The troll then threatens high-tech firms with litigation for infringement of its patent, unless the firm agrees to pay a licensing fee that may run into the hundreds of thousands of dollars. Even if the firm is convinced that it has not infringed the patent, it will often prefer to pay the licensing fee rather than risk litigation, as cases can take years to settle in court and entail exorbitant legal costs. Patent trolls have become a nightmare for companies in Silicon Valley, in particular, including giants Google and Apple. However, trolls also harass small start-up companies, some of which have been forced out of business. The business is so lucrative that the number of patent trolls has grown exponentially in the USA: in 2012, 61% of patent litigation was brought by patent trolls. The America Invents Act of 2011 set out to limit the power of patent trolls by preventing ligitators from attacking several companies at once in a single lawsuit. In reality, this has had the opposite effect by multiplying the number of lawsuits. In December 2013, the House of Representatives passed a bill that would have required a judge to determine early on in the legal process whether a given patent was valid. However, the bill failed to pass into law after being shelved by the Senate Judiciary Committee in May 2014 following intense lobbying by pharmaceutical and biotech companies and universities, which feared the new law would make it hard for them to defend their own patents. Ultimately, reform may come not from Congress but from the judiciary. A decision by the US Supreme Court on 29 April 2014 should make patent trolls think twice in future before bringing frivolous lawsuits. The decision departs from the so-called American Rule, which generally requires litigants to bear their own legal costs. It brings litigation closer to the English rule of ‘loser pays,’ whereby the unsuccessful litigant is forced to bear the legal costs of both parties – which may explain why patent trolls are much less common in the UK. In August 2014, US judges cited the Supreme Court judgment in their decision on an appeal filed by Google against patent troll Vringo, which was claiming hundreds of millions of US dollars. The judges found against Vringo in the appeal on the grounds that neither of its two patents was valid. Source: compiled by Susan Schneegans, UNESCO Google was included in this list for the first time in 2013 and Amazon in 2014, which is why the online store does not appear in Table 9.3, despite having spent US$ 6.6 billion on R&D in 2014. Intel’s investment in R&D has more than doubled in the past 10 years, whereas Pfizer’s investment is down from US$ 9.1 billion in 2012. The technological ambitions of the new giants of information and communications technology (ICTs) can broadly be described as smoothing the interface between information technology and the physical world. Amazon has optimized the consumer experience by developing services like Prime and Pantry to meet consumer needs in almost real time. Amazon recently introduced a limited pilot of the Dash Button, an extension of Amazon Pantry that allows a user to re-order a household consumable by pressing a physical button. Google has made several acquisitions of products at the interface of computation and the physical world, including autonomous thermostats, and has developed the first operating system specifically for such low-power devices. Perhaps the most ambitious project is Google’s self-driving car, which is scheduled for commercial release in the next five years. Conversely, Facebook is developing virtual reality technology based on their acquisition of Oculus Rift, an approach that will integrate people into the digital environment, rather than vice versa. The small sensors that facilitate this connectivity are also being applied in industry and health care. Since it relies on service contracts for much of its revenue, General Electric is currently investing in sensor technology to collect more information about the performance of its aeroplane engines in flight. Meanwhile, in health care, a few new enterprises are experimenting with the use of data from personal activity trackers to manage chronic diseases like diabetes. Massachusetts a hotspot for non-profit R&D Private non-profit organizations account for about 3% of GERD in the USA. In the 2013 fiscal year, federal obligations to non-profits for R&D totalled about US$ 6.6 billion. Among non-profits, those in the State of Massachusetts received the greatest share of federal funding: 29% of the total in 2013, driven primarily by the cluster of research hospitals near Boston. 146
United States of America Figure 5.8: Patents in force in the USA, 2005 and 2013 Other major economies are given for comparison 2.5 Non-resident Resident 1 164 800 2.0 1.5 267 280 1 570 897 788 602 Millions 1.0 447 415 107 872 1 015 183 1 222 702 895 366 0.5 586 493 0.0 126 039 56 357 2005 2013 2005 2013 2005 2013 China Japan USA Source: WIPO statistics online, accessed on 27 August 2015; patents held by the primary patent office for each economy: China’s State Intellectual Property Office, Japan Patent Office, European Patent Office, US Patent and Trademarks Office for the USA Figure 5.9: Triadic patents of the USA in the USPTO database, 2002–2012 Number of triadic patents (nowcasting) for the world’s largest economies for this indicator Chapter 5 20 000 15 000 17 355 16 828 16 511 Japan 15 391 EU 13 978 USA 13 765 10 000 6 890 5 000 Germany 5 468 2 752 1 570 Korea, Rep. 2 878 France 2 555 China 1 851 0 272 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Note: Triadic patents are filed by the same inventor for the same invention in the USA, Europe and Japan. Source: OECD Patent Statistics (database), August 2015 147
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UNESCO SCIENCE REPORT Towards 2030
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Table S2: R&D expenditure by sector
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Page 778 and 779:
Page 780 and 781:
Table S3: R&D expenditure as a shar
Page 782 and 783:
Table S3: R&D expenditure as a shar
Page 784 and 785:
Table S4: Public expenditure on ter
Page 786 and 787:
Table S5: Tertiary graduates in 200
Page 788 and 789:
Page 790 and 791:
Page 792 and 793:
Table S6: Total researchers and res
Page 794 and 795:
Page 796 and 797:
Page 798 and 799:
Table S7: Researchers by field of s
Page 800 and 801:
Table S7: Researchers by field of s
Page 802 and 803:
Table S8: Scientific publications b
Page 804 and 805:
Table S9: Publications by major fie
Page 806 and 807:
Page 808 and 809:
Page 810 and 811:
Table S10: Scientific publications
Page 812 and 813:
Page 814 and 815:
Page 816 and 817:
Page 818:
UNESCO SCIENCE REPORT Data obtained
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UNESCO SCIENCE REPORT

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