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Economic Downturn => Downturn in Patent Filings
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| The first chart below shows a time series for the percentage of continuation
| applications and RCE filings as compared to the total UPR filings (Utility,
| Plant, and Re-Issue applications). Remember here, that for most PTO
| statistics, RCE filings are counted as a utility application. According to
| this data, 27.6% of all of the UPR filings thus far in FY09 are RCEs -
| continuing a steady trend of of rising RCE filings. (Note - the RCE data also
| includes historical data for CPA and R129 filings).
| In the title of this post, I link the economic downturn with the downturn in
| patent filings. Some may also link the drop in patent filings with other
| recent events that may drop the allure of a patent application - namely, KSR
| v. Teleflex; eBay v. MercExchange; Bilski; Seagate; the prospect of further
| patent reform; the Second Pair of Eyes review; 750,000 backlog of unexamined
| patents; and the 26 month average pendency before the first OA.
Another bubble ready to burst!
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| Sadly most of our thinking around legal protection of knowledge has
| been "derivative" in nature, a shoddy cut and paste job from the "mature IP
| systems" of the West. However, as the Bilski case shows, even these "mature
| IP systems" are having second thoughts on how they treat knowledge, or in
| this specific case, software patents. As I have argued in my previous blog
| entry, "The Practical Problem with Software Patents," the litigation-ridden
| path followed by US in granting software and business method patents is
| something we must avoid at all costs.
The Patent Bubble... Still Growing
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| The brainchild of former Microsoft CTO, Nathan Myrhvold, Intellectual
| Ventures has reportedly amassed $5 billion in capital and a portfolio of over
| 20,000 acquired patents -- and it's looking for more. From the perspective of
| the tech sector, Intellectual Ventures combines two questionable business
| models, the patent troll and the pyramid scheme, in a form that evokes Wall
| St.'s cleverness in designing glitzy vehicles for esoteric assets.
| IV does not create or market products, so it is invulnerable to the patents
| of others. It looks like a patent troll, because it makes money from "being
| infringed." But IV has a new twist: The companies that settle not only pay
| license fees but are induced to invest in IV, thereby providing the capital
| to acquire more patents, set up new licensing funds, and pursue other
| There you have it: Arbitrage in exotic assets. A system that values legal
| instruments over real products. And a context-dependent and uncertain value
| for the legal instrument itself. No better than mortgage-backed derivatives.
| And maybe a lot worse.
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