Patent Usage and Value Research Project
= "The PatVal-EU project ... surveyed European inventors published in 2005 gives an interesting overview of the value and ownership of patents in the EU".
URL = http://ec.europa.eu/invest-in-research/pdf/download_en/patval_mainreportandannexes.pdf
Description
Brian Loudon:
"The PatVal-EU project which surveyed European inventors published in 2005 gives an interesting overview of the value and ownership of patents in the EU. The headline results from their research are interesting, the vast majority of named inventors, around 90% work for an organisation and the self-employed were less than 8%. The vast majority of this 90% were working for large private sector companies. It is interesting to look at the surveyed motivations and remunerations for inventors, personal and social satisfaction consistently rated above career advancement and monetary reward. This is probably just as well as the survey also shows that only around 40% of inventors received monetary compensation, and of those cases 90% were transitory arrangements rather than the sort of ongoing royalty payment we popularly imagine to result from a patent. Taken together, the self-employed inventor and the employed inventor who receives a royalty arrangement only add up to around 12% of the total pool of named inventors.
Around 55% of patents have commercial use for an organisation while 13% are licensed, leaving just over a third of patents unused. The monetary value of the patents studied is also heavily skewed, with a small number of patents yielding high economic returns. 46% of patents will each have a value of less than 300,000€ whilst the top 7% of patents have values of 10 million euros or more (up a further order of magnitude to more than 300 million euros). This means that in terms of monetary value the top 4% of patents have around three quarters of the total value of patents in force.
The overall impression that this study gives is one of centralised large corporations dominating the innovation process and the values realised from the resulting patents. The named inventors are largely employees, the study also notes that the vast majority never change job in their career. This picture is quite different from the popular image of the lone inventor or swashbuckling entrepreneur. This is also the image that holds sway in the entrepreneurial incubators springing up all over the world. As an interesting aside this series of articles on Forbes written from a free-market point of view makes the case that the budding entrepreneurs leaving incubators are in fact a new form of labour rather than free-wheeling mavericks.
This discussion is relevant when we think about the ownership and distribution of property and capital in the economy and the balances of power that results from them. The ownership and value of patents reflects discussions such as the now-famous work of Piketty on the distribution of capital and the increasing concentration of capital in fewer and fewer hands. It would likely take a lengthy research project and a work of the gravity of Piketty’s to draw conclusions about patent ownership, but there is at least some correlation between large corporations and patent ownership and wealth.
“The Impact of the Patent System on SMEs ” from 2010 a study published by the Centre for Business Research for the UK’s Intellectual Property Office (IPO) explores similar themes of patent ownership and usage, but from the specific point of view of Small to Medium sized Enterprises (SMEs).
They point out that SMEs may find that the costs associated with patents are relatively higher as compared to a large corporation, and they may struggle to find the capital funding to take advantage of a given innovation and enforce the resulting patent. As a result they find that SMEs will very often use other means to achieve returns on R & D investment, through secrecy, being first to market, using skilled labour or specialist equipment." (http://www.loud1design.co.uk/loud1design/open-source-product-innovation/)