Global Strategic Patenting and Innovation – Policy and Research Implications

24 Pages Posted: 7 Mar 2016 Last revised: 25 Apr 2016

See all articles by Dieter Ernst

Dieter Ernst

East-West Center; Centre for International Governance Innovation (CIGI)

Date Written: March 18, 2016

Abstract

As an exclusionary property right, patents invite their use as a strategic weapon to shape markets and to reap monopoly rents through patent monetization. The increasing variety and global reach of Strategic Patenting strategies pose new and under-researched challenges for the international distribution of innovation gains.

This Think Piece explores the proliferation of strategic patenting strategies, and highlights the growing complexity and uncertainty of the international patent system that result from the increasing use of patents as market deterrents and as a new asset class. Part One of the paper introduces four manifestations of strategic patenting that are well documented in the literature, i.e. the use of standard-essential patents (SEPs) as entry deterrents; aggressive patent infringement litigation that has galvanized the smart phone wars, with Apple as the pioneer; the proliferation of patent monetization services; and the use of cross-border patent licensing as a tool for corporate transfer pricing and tax planning. While existing research provides important insights into the drivers, we lack systematic theoretical and empirical research on how strategic patenting affects the international distribution of innovation gains.

Part Two seeks to shed light on two recent forms of strategic patenting which need both theoretical and empirical case study research, i.e. the rise of Sovereign Patent Funds (SPFs), and first signs of patent-avoiding latecomer strategies, with China’s Xiaomi as the most prominent example. The paper concludes with questions for policy and further research.

Keywords: intellectual property, patents, the governance of patent systems, innovation, the geography of China

JEL Classification: 032, 034, 053, F2, F69, L84

Suggested Citation

Ernst, Dieter, Global Strategic Patenting and Innovation – Policy and Research Implications (March 18, 2016). Available at SSRN: https://ssrn.com/abstract=2742700 or http://dx.doi.org/10.2139/ssrn.2742700

Dieter Ernst (Contact Author)

East-West Center ( email )

1601 East-West Road
Honolulu, HI 96848-1601
United States

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

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