IP2Innovate

Valerio Sterzi is on a mission. Ever since his undergraduate days at Bocconi University in Milan, he has been fascinated by the economics of innovation. At first he had great faith in patents as a tool for fostering innovation.

IP2Innovate

A new academic study by economists at the universities of Bordeaux, Grenoble, and Universitat Pompeu Fabra (Barcelona) highlights how patent assertion entities (PAEs) are continuing to take advantage of weaknesses in Europe’s patent system. The study, entitled Patent Privateering, looks at one specific method of patent abuse. Patent privateering is a term to describe a situation where a patent owner hands patents to a patent assertion entity (PAE) to exploit for mutual benefit, allowing the patent owner to maintain a secret stake in the patents. The study concluded that patent privateering is widespread in Europe. The practise has been around for many years but as other jurisdictions including the US have made it harder, Europe’s patent system is a ripe target for abuse. This is largely because patent courts in Europe do not apply the principle of proportionality, and instead hand out injunctions to patent owners almost automatically.

Patrick Oliver

This year World Intellectual Property Day focuses on SMEs. As the two examples below show, patents can be an SME’s worst enemy, as well as their best friend. Abuse by patent assertion entities is a serious and growing threat in Europe, especially to small and mid-size innovative firms. The gaming of the European patent system must stop.