Markets in the driving seat? Revisiting the future of IP

Rather than striving to be as close to reality as possible, the report selected four driving forces and let them play out in unrestricted what-ifs:

• Market Rules – where business is the dominant influence
• Whose Game? – where geopolitics comes to the fore
• Trees of Knowledge – where society shapes policy
• Blue Skies – where technology is preeminent

Market Rules imagines a world where corporate interests, above all else, shape IP, where patents are essentially business tools rather than purely legal protections. In this chronology, increased recognition of patent value fuels a surge in filings, licensing and monetization through financial instruments. Large corporations strengthen their control, consolidating portfolios and shaping regulations to protect their dominance. With more players entering the system, complexity increases, leading to concerns over accessibility, fairness and efficiency.

As businesses push for greater harmonization, reform efforts gain momentum, ultimately leading to a framework resembling a global patent right. The result is a highly efficient but intensely commercialized system prioritizing economic power over broader societal or technological concerns.

Growth but no global patent

The scenario was correct in predicting the growth in patent filings. According to WIPO, there were over 3.5 million applications worldwide in 2023, an increase of nearly a third over 2014 and almost double the 1.85 million filed in 2007. Moreover, the origin of applications has become much more diverse, with China eventually overtaking Japan and the United States on its rise to the fore. Patent applications are also generally more complex, longer and in a wider variety of languages.

However, the intensified workload resulting from this expansion has not (yet) led to anything that resembles a global patent. Cooperation between IP offices has deepened, particularly through the IP5 group of the five largest offices (the EPO alongside the national offices of China, Japan, South Korea and the United States) and through bilateral Patent Prosecution Highway (PPH) agreements. Nevertheless, this cooperation is focused on tools – for example, the Cooperative Patent Classification introduced in 2013 – rather than harmonization of laws or practices. Despite that, there are some bright spots. The scenario predicted the United States would adopt a first-to-file policy in "late 2013." This change came under the America Invents Act in March 2013 and aligned the country more closely with the rest of the world. 

The other notable step toward harmonization has come in Europe. The scenario correctly foresaw that negotiations over a single patent right in the European Union would take many years and suffer frequent setbacks, but it predicted there would be "a common European patent" in 2021. In fact, the Unitary Patent was launched in June 2023 and covered just 17 of the 27 EU Member States (since expanded to 18), but it is still probably the single most significant change in patent protection this century. 

Being built on the premise of commerce's soft power overshadowing diplomatic or governmental impetus, the scenario imagined some jurisdictional changes that seem otherwise unlikely. For one, it described the merger of the Chinese and Japanese systems to create a de facto single patent office for Asia – one that shared mutual recognition with the USPTO. Today, there is no sign of this happening, and no real demand for it either: differences in laws, procedures and languages ensure that national patent systems continue to flourish.

The political obstacles to integration are greater than this scenario envisaged, though technological improvements (such as e-filing and machine translation) and the gradual expansion of the Patent Cooperation Treaty (PCT) have overcome many of the practical impediments. Indeed, given the retreat from globalization in many parts of the world today, the prospect of a "de facto global patent" is probably further away now than it was in 2007.

The rise in disputes

When it comes to litigation, a single global system is arguably even less realistic, despite the success of the EU's Unified Patent Court since its launch in 2023. The scenario pictured that businesses would fight back against the increased costs of legal proceedings and demand simplification. In reality, notwithstanding its expense and intricacy, the appetite for litigation seems to have increased in the past decade and a half.

Compared to 2007, there are more options for international dispute resolution with the emergence of specialized courts and judges in countries such as Brazil, China and India. In the United States, litigation was turbocharged by the introduction of the Patent Trial and Appeal Board (PTAB) in September 2012 – and proceedings are often undertaken in parallel with actions before federal courts and the International Trade Commission.

This more complicated litigation landscape worldwide has led to expanded opportunities for forum shopping and strategic plays: In recent years, we have seen anti-suit injunctions and even anti-anti-suit injunctions, leading to an EU complaint against China at the World Trade Organization. Much of this convolution has arisen in disputes over standard-essential patents (SEPs) and fair, reasonable and non-discriminatory (FRAND) licensing, where courts such as those in the United Kingdom have been willing to rule on the terms of global licenses between parties.

Although the scenario inferred an upturn in patent licensing, it did not foresee the importance of disputes over SEPs and all the manifold issues that these raise – about jurisdiction, disclosure, interaction with competition law, the power to grant injunctions and the calculation of royalty rates, for example. 

Patents as financial instruments?

Another area where the scenario was half-right was in predicting the economic impact of patents. It is true that today, the value of intangible assets (including patent rights) is much better understood, with intangibles accounting for 90% of the enterprise value of the largest U.S. firms. Patents and other IP rights are frequently valued and traded and can be very important in mergers and acquisitions and in insolvency proceedings. Banks and investors have become more willing to issue loans backed by IP assets.

However, contrary to what the scenario envisioned, patents are not treated as akin to "the exotic financial products of the 20th century," whose uncertainty makes them particularly attractive to investors. There is no widely recognized patent index or IP trading system, and a lack of transparency and information has hindered efforts in this direction, such as open auctions and online marketplaces. 

One surprisingly accurate prediction in the scenario is a global economic slowdown from 2008, though the extent of the financial crisis was not anticipated. In the scenario, this downturn was seen as promoting trade in IP as a new asset class. Ironically, by denting investors' confidence in high-risk and under-regulated ventures, the financial crisis may actually have set back the development of trading IP assets. 

Contrary to the hypothetical 2025, therefore, we are still a long way from a global patent system and an advanced IP marketplace. Yet thanks to a mix of incremental and fundamental improvements, the patent system continues to serve users well – and confidence in it is probably higher than might have been expected 18 years ago.