Figure 1. USPTO Utility Patents 1965-2000
Intellectual property rights are the rights granted to the creators of intellectual products. Ideas are, of course, recognized as being part of humanity's common base and therefore not appropriable by a private person. In this respect, they are outside the law. A literary subject, an artistic principle, a political idea, or a scientific vision, for example, cannot be monopolized. What can, however, tilt over into private property is the concretization of the idea, theme, or principle. Only then may it be the object of a private right.
The economic importance of intellectual property is rising. Its value is increasing as a share of average total firm value. The number of patent applications is growing at double-digit rates in the major patent offices, and licensing and cross-licensing are being employed with greater frequency than ever before, particularly so in high-tech industries. The greater intensity of innovation, characteristic of the knowledge-based economy, and the increase in the propensity to patent, which indicates the emergence of new research and innovation management techniques, are the main factors of this quantitative evolution.
In 1998, 147,000 U.S. utility patents were granted, corresponding to an increase of 32 percent compared to 1997. Over the past ten years both patent applications and patent grants in the United States have increased at a rate of about 6 percent per annum, compared to about 1 percent per annum in the preceding forty years.
In Europe, similar effects are observed, with applications to the European Patent Office (EPO) rising at an annual rate of 10 percent per annum over the past five years. Interestingly, the response of the EPO, unlike the USPTO, has been to hold the grant rate steady, which means the application-grant lag has risen (see figure 1).
Figure 1. USPTO Utility Patents 1965-2000
The evolution is also qualitative. Patents are being registered on new types of objects such as software (17,000 patents last year, compared to 1,600 in 1992), genetic creations and research tools and devices for electronic trade over the Internet, and by new actors
(universities, researchers in the public sector). All this contributes to the unprecedented expansion of the knowledge market and the proliferation of exclusive rights on whole areas of intellectual creation.
This evolution creates a paradox, for patents are generally not considered a good mechanism to protect
innovation.
Three main factors explain such trends.
1. The first deals with changes in patenting policy in the United States and Europe. The main aspect of changes concerns the fact that patent offices have completely given up their regulatory role, as the amusing example of the Australian office shows. Until the 1970s, the general view of patent offices was that patents were anticompetitive and not good for the economy. Patent offices were more often considered "rejection offices" than institutions for supporting innovators. They therefore played a significant regulatory role, blocking or slowing down private appropriation in certain fields.
2. The second reason concerns the current context of technological revolution. The new emerging fields, such as information and com¬munication technologies, nanotechnologies, biotechnologies, and so on, are providing numerous opportunities for innovation, which automatically generate an increase in patenting activities.
3. A third reason relates to the new methods of R&D management that make patents intangible assets of increasing importance. The creation of intellectual property becomes a central goal of the global strategy. For a long time, the belief about intellectual property was that patents were for defensive purposes only, and that patents and related knowhow should not be sold. Licensing was a drain on internal resources. Now patents are considered a unique means to generate value from intangible assets, and companies are starting to exploit this through aggressive licensing programs.