Going soft on exclusivity: a patent paradox

Scenarios for the Future was a research project carried out by the EPO to hypothesize on the shape of patenting 25 years into the 21st century according to the prominence of various global drivers. The result was four distinct arrangements of the invention scene:

• Market Rules – a commerce-lead situation
• Whose Game? – the politics of nations define IP
• Trees of Knowledge – society looks to patent alternatives
• Blue Skies – industries separate on exclusivity needs

This article focuses on Blue Skies, a world where technological advances both apply pressure for and fuel significant changes to the patent system. In this scenario, patent offices utilize digital processes to improve quality and reduce backlogs, with fully automated search tools and translations enhancing access to patent information.

However, two separate types of patents emerge in response to market demands — particularly the urgencies of delivering climate solutions, ensuring interoperability and licensing patents covering complex products.

The first type is known as a "soft patent" and caters to the wants of information and communications technology (ICT) and sustainable engineering. Crucially, soft patents, particularly those associated with hydrogen fuel cells, come with a compulsory license of rights so that innovation is not blocked in sectors that mitigate environmental damage. This attenuated exclusivity stands in contrast with the "classic patent" right, which is used by pharmaceutical companies and other businesses developing more self-contained inventions that require heavy investment in research.

Hence, on the one hand, soft patents encourage open-source collaboration and patent-pooling, and on the other, compel innovators who feel this IP's inadequacy to rely on other forms of protection, such as trademarks, trade secrets and digital rights management (DRM), for various aspects of their goods and services. 

Blue-sky thinking comes down to earth

Venturing that the global patent structure would split into two by 2025 is very much off-target from our current perspective. Although discussions have taken place — and will likely continue — about introducing patents with varying terms and levels of exclusivity for different sectors, none has matured into a concrete proposal, and no country has implemented such a framework. It should also be noted that while utility models have existed in some jurisdictions for many years, their shorter terms and lower barriers to entry make them inappropriate for many companies. 

In Blue Skies, soft patents are seen as an imperative, specifically to incentivize engineering geared to tackling climate change and delivering clean air and water. The good news is that, in reality, no new category of protection has been needed thus far, as the existing patent bargain has proved suitable for a wide range of sustainable innovations. 

In any case, the report was right to predict that technology diffusion would accelerate and that products such as mobile phones would become much more sophisticated. Interdisciplinarity, interoperability and the ubiquity of software are key to the success of computers, televisions, cars and many other goods today. Moreover, the scenario correctly identified some of the challenges this has posed for the patent system, particularly in the ICT area: thickets and the fragmentation of rights (the "patent mosaic"), examination backlogs, obstruction grants and the threat of trolling. 

Yet the problems identified with ICT, in particular, have been addressed in today's context, albeit imperfectly. Fair, reasonable and non-discriminatory (FRAND) licensing of standards such as 4G and 5G and the development of patent pools for technical applications like audio and video compression have addressed many of the flaws identified in 2007. These solutions have helped to ensure that patents are enablers, rather than blockers, of innovation – though debates continue about the most equitable ways to set FRAND terms and to inspirit pro-competitive behavior. 

All of this is to say a patent that is declared essential to a technical standard and which must be licensed on FRAND terms is not dissimilar to the soft patent as described in the EPO project.

IP offices embrace AI

Another area where the thought experiment was accurate was in foregrounding the extent to which IP offices, particularly the largest ones, have embraced computerized and automated processes. Even so, the industry experts of that time may be forgiven for their omission of artificial intelligence (AI) as a factor, given that its shake-up of digital technology has been unprecedented in the truest sense. 

Over the past 18 years, digitalization has transformed patent prosecution and management, with e-filing, online databases and machine translation replacing faxes and letters. Owing partly to lockdowns during the COVID-19 pandemic, this uptake has gone even further than envisaged, with oral proceedings at the EPO now routinely held via videoconference and in-person meetings increasingly supplemented by webinars and hybrid conferences.

Despite the broad enthusiasm witnessed among patent offices, the benefits of computerization seen in the posited 2025 have not all fully materialized. Machine translation is increasingly popular and widely used (the EPO's Patent Translate covers 32 languages), but it has not replaced manual efforts in most cases. Translation remains a legal requirement in many countries, though the London Agreement, which entered into force in 2008, and the Unitary Patent, launched in 2023, have somewhat reduced the burden.

Contrary to what was imagined in the alternate world, patent backlogs remain significant, especially in certain technical areas, thanks to the increase in both the number and complexity of applications. The controversy about patent quality remains as earnest as ever in light of the difficulties of navigating prior art and ensuring consistency across a burgeoning system. Recognizing the deleterious effects of quantity-first or occlusive patenting strategies, the Industry Patent Quality Charter was founded in October 2022. The companies subscribing to it advocate for improvements to the European patent system and voluntarily hold themselves to a higher standard of patent conduct.

Today, IP offices are increasingly using AI tools to handle the volume of cases, improve predictability and cut inefficiencies in areas such as classification, searching and customer engagement. It is also clear that AI has the potential to go much further. For example, it could enable more uniform and reasoned decisions, offer clearer and quicker communication and provide practical prompts for users – easing administrative work and reducing errors. 

Over the next few years, we are likely to see more discussions about how AI can be used justly and responsibly in a wide variety of tasks so that the procedural rewards can be reaped while legal security, accountability and independence are maintained. 

The patent system remains strong

Contrary to what was pictured in this scenario, patents, as we know them, continue to flourish. With that said, supporters of the IP system should never be complacent. The combined strains of the pace of technological development, diversity of fields, incumbency of sustainable action and new questions about the role of AI and even autonomous innovation may lead to further calls for adaptation in the near future. 

The fact that the patent system has persevered without fundamental changes for the past 18 years is no guarantee that the same will be true for the next 18. If the EPO or another organization were to carry out a similar project in 2025, there would be many fascinating issues to identify and solutions to propose. Patenting, downwind of invention, never rests.