Will New Register Solve the Issue of Transparency in Patent Ownership?

In a previous post issues associated with transparency in patent ownership were discussed, and a survey seeking feedback on the depth, and breadth of the problem was generated. Finding the owner of record for patents is a well recognized problem with worldwide implications. The issue can be a complex one, and stems from a variety of causes including corporation name changes, mergers and acquisitions, and even simple language and translational errors.

The results of this survey have now been released, and one of the conclusions was that a register of patent ownership would be a useful tool for providing transparency in this area. A press release announcing the launch of just such a registry provides details:

A group of leaders in Intellectual Property and Open Data has today launched ORoPO (www.oropo.net), the world’s first Open Register of Patent Ownership. Voluntary, non-profit-making and freely accessible online, ORoPO offers a simple solution to significant problems with the accuracy of current patent ownership records, and already includes details of patents owned by its founder members – IBM, Microsoft, ARM, BAE Systems, Shazam, Patent Properties, Conversant, and Finjan.

ORoPO is operated by its founder members, and led by CEO Roger Burt. They are supported by an Advisory Board including David Kappos (Cravath, and former director at the USPTO), Sir Robin Jacob (UCL and former IP judge), Sir Nigel Shadbolt (co-founder of the Open Data Institute), Tony Clayton (formerly Chief Economist of the UK IPO) and Heather Meeker (O’Melveny & Myers).

Roger Burt, CEO of ORoPO provided the following statement on the occasion of the launch:

“Analyzing a company’s patent portfolio is so fraught with difficulty, you can’t really trust the data. You don’t know what company name patent rights are registered under, whether companies have changed names, whether a subsidiary has been sold off or new divisions have been purchased, or whether patent ownership data has been updated after a sale. It’s a very uncertain area “

Many inventors and corporations never bother to change information related to ownership and patent length whenever it changes/transfers over, since it is not strictly mandated by law. These lenient practices associated with patent litigation and licensing have existed since we first started realizing the value of such intangible property. Over the years, the vast number of complex patents filed each day have now accumulated into a set of not-so-reliable information.

According to a WIPO assessment made by Yo Takagi, Assistant Director of WIPO, and David Kappos, Former Undersecretary of Commerce for Intellectual Property and Director of the US Patent and Trademark Office, nearly 25 percent of the worlds patent data on ownership may be inaccurate.

This creates a huge problem for anyone trying to gain knowledge about ownership of intellectual property since a quarter of the information is not right, mostly related to assignee/applicants and translational issues over different countries. This sentiment was summed up in the ORoPO report that accompanied the launch of the register:

“These inaccuracies in the global patent record have significant and far-reaching consequences. The resultant inefficiencies, elevated costs and risk uncertainties create huge cost barriers to innovation, barring meaningful entry to all but the richest, most powerful corporates, depress the market for licensing transactions and increase the risk of litigation.”

A more reliant record of the worlds patents would make it easier for inventors to know the status of existing patents before they proceed with their inventions and as a result reduce number of litigation cases and facilitate more licensing. Historical trends suggest that a great deal more value can be realized though proper licensing rather than litigation.

Copies of the full report, and additional details on the register can be found on the ORoPO website found at www.oropo.net.

Representatives from founders IBM, Microsoft ARM also provided perspectives on the launch of ORoPO:

Manny Schecter, IBM’s Chief Patent Counsel commented on the need for transparency:

“ORoPO is a simple solution to a complex and long standing problem.  Greater transparency around patent ownership is vital to eliminating transactional inefficiencies and enabling a patent system that runs optimally for every constituent in the system; from patent owners to innovators, licensees and the public.”

Erich Andersen, vice president and deputy general counsel at Microsoft added:

“Microsoft believes that patent ownership transparency continues to be an important part of a well-functioning patent system. Microsoft has publicly listed all the patents the company owns since March 2013, and we will continue to do so via our participation in ORoPO. This voluntary effort, led by top patenting companies, will help to ensure that the patent system continues to promote and encourage innovation across our economy.”

ORoPO CEO, Roger Burt also commented on the hindrances of IP as a functional asset:

“Uncertainty around patent ownership inflates transaction costs, discourages the monetization of patent rights through licensing and innovation and holds back the evolution of intellectual property as a functioning asset class.  Without clear line of sight to ownership, the markets simply will not engage.”

Phil David the head of IP at ARM believes that companies should support ORoPO so that their patents are properly stated:

“Knowledge of who owns a patent is the starting point for any commercial transaction in respect of that asset and hence the starting point for many of the ways in which a patent owner might realize value from its patents. Since it is the intention of most patent owners to receive value for their patents, an ownership connection with them is completely intuitive. ORoPO has the virtue of dividing up the problem of inaccurate records amongst those that have a vested interest in their respective ownership connections being properly stated. We hope that enough owners care enough about their ownership interests being properly stated that they will take on their share of fixing the present inaccuracies by participation in ORoPO.”

The laws created to record patent ownership were created a long time ago. This information needs to be updated much more frequently to promote innovation. According to Professor Sir Robin Jacob, patent purchases and licenses will also increase because you are removing an obstacle to them. This will be good news all around, and patent owners need to capitalize on this. Corporate executives estimated that patent licensing will increase by 6% on average if there was greater transparency and accessibility. This will increase licensing income by $30 billion annually, potentially unlocking an economic value of $300 billion.

ORoPO, a non-profit organization for an open global register of patent information is trying to bridge the gap between financial markets and reliable patent information. They have the support of major corporations such as IBM, Microsoft, ARM, BAE systems, Shazam, Conversant, Finjan, Patent Properties and patent owners alike. The ORoPO database requires applicants to report any change of ownership or strategic change as a volunteer service to function. All the companies listed above have already disclosed accurate information about their patent portfolio on the ORoPO database as the first step.

Achieving openness and transparency for patent ownership is a problem worth fixing and ORoPO is a simple potential solution, designed with the patent owner in mind.

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This post was co-written by Anthony Trippe, Manik Mehta & Riley Collins

Comments 5

  1. Tony,
    I hate to be negative about this, but I really don’t see this solving any problem. If contributions to the database are voluntary, and currently only supported by a very small number of patent owners, then the value of this database depends entirely upon the collation into one place of a bunch of information that is otherwise scattered amongst national registers. If the founder members have indeed, as the blog suggests, already submitted up-to-date ownership records to this new database, what was preventing them in the past from submitting the same information to a nationally-recognised authority? Patent owners frequently seem to object about ‘administrative burdens’, including sending ownership information to national offices. Will this small group of patent owners *continue* to provide information to a not-for-profit that they apparently have available but can’t bothered to send to a national patent office – or is this just a flash in the pan? Will the membership expand to include *all* patent owners? It’s one thing to start a project like this with a few prominent companies, but it is relatively rare than users want to analyse these “major company” portfolios anyway – the more realistic problem is the multiplicity of smaller businesses, still large enough to be a tempting take-over target, which hold a portfolio of a reasonable size. As your blog suggests, the root of the problem is the laxity in national laws which allows asset owners to neglect maintaining an asset register. This is not allowed for other assets such as houses, land or (in the UK at least) cars. Why is it allowed for intangible assets like patents?
    I really hope I’m wrong, but at the moment this looks like “too little, too late”.

    1. Hello Stephen,

      Thank you for your insightful comments. As always, you have identified some of the key issues that will likely plague this initiative going forward.

      Personally, I think the companies involved would be happy to submit this data to a nationally-recognised authority, but I am not sure which authority that would be. I believe it is stated in the press release that the organizers will be cooperating with national offices, but as you concluded with most already have procedures in place for formal re-assignements that a lot of patent owners don’t use. So is there a comprise between formal re-assignment and registration?

      It is also worth noting that a number of these companies already have systems in place where they have shared their ownership position openly, so for these companies this information may already be available, albeit not in one place.

      Ultimately, an issue has been identified, and many believe it is important. Will this solve the problem, perhaps, perhaps not, but it is likely worth trying since the alternative is legislative action that would probably need to occur between several national offices simultaneously, and we know that is unlikely to occur.

      Best regards,
      Tony

  2. As you know Tony, I have been involved with this initiative from the start. Stephen seems to think that ORoPO ends with the initial participants. It doesn’t – and expect to see a continuous stream of new members. And as for “too little, too late” – the view of everyone involved is better late than never.

    As for the observation that all ORoPO data is available on national registers, there are a myriad of reasons why this is not true. I suggest a further read of Who Owns the World’s Patents? available on the ORoPO website (ORoPO.net).

  3. Nigel, I will refrain from further comment until after we have had a chance to discuss this, but I do want to correct one or two points in your post. You say, “Stephen seems to think that ORoPO ends with the initial participants.” That is not my view. In my post I said, “Will the membership expand to include *all* patent owners?” This kind of initiative obviously has more value if more members join, and I have never been under the misapprehension that that would not happen. My point is, that real value will depend upon how comprehensive this register turns out to be; as I said before, “the more realistic problem is the [ownership data on the] multiplicity of smaller businesses…which hold a portfolio of a reasonable size…”, not on whether a small – or even a large – number of prominent/high volume applicants take part in the project.

    1. I will look forward to hearing from both of you once you have an opportunity to discuss some of the particulars of the register in additional detail. Thank you both for engaging on this important topic, and development.

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