Global IP Law Group: patent rules do more than just protect innovators

Transcript

Intellectual property rights have increasingly come to the fore, as the music and pharmaceutical sectors rally around protecting their interests. World Finance speaks to Steven Steger, Founder and Managing Partner of Global IP Law Group, about how patent rules encourage investment in innovation as well as defending innovators.

World Finance: Steven, why do we have to maintain global patent rules in an increasingly globalised world?

Steven Steger: Well if you think about the dual purpose of patent law, it’s really to, number one, encourage investment in innovation and investment in research and development, by providing a protection mechanism so that inventors can realise a return on their investment and research and development by having exclusive rights to practicing inventions. The second and almost more important reason for the system is to encourage disclosure of inventions around the world, and that’s really a key aspect, as the world becomes smaller and the economy’s become more global, is making sure that people are incentivised to disclose their inventions, so those inventions can benefit the world on the whole.

[Patent law] is making sure that people are incentivised to disclose their inventions, so those inventions can benefit the world on the whole

World Finance: Now let’s talk about how those challenges apply to the telecommunications sector.

Steven Steger: The telecommunications sector is a difficult spot, because it’s a sector that’s really driver by standards, and technology needs to comply with the standards. Standard essential patents create a difficulty. One of the purposes of the disclosure part I discussed of patents is to allow people to improve upon patents and also understand what a patent covers, and design around what the patent covers, so that they actually come up with new innovations that are different from what’s covered. When you have standard essential patents, you lose that second part of being able to design around it, because you have to comply with the standard.

World Finance: So tell me about some of the issues that your clients are currently grappling with?

Steven Steger: There’s a real concern around lack of certainty in what patents covers these days. There’s been so much change, particularly in the US, around patent laws, and there’s a lot of reform going on. There’s a major overhaul of the patent system in 2011. The Supreme Court has become much more active in changing the patent laws, and Congress is talking about enacting further changes to the patent law. And that really creates a system where people don’t know what patents cover. There’s significant issues with trying to licence and getting people to agree on the scope of patent coverage, and that drives up the transaction costs. That’s not good for the innovation sector, because if there’s more certainty around what patents cover, you’re more able to agree with the opposing party, frankly, and come to real agreement on where licence rates should be. There’s been a large increase in litigation in the US, particularly because there is not certainty and you can’t get that agreement, short of litigation.

World Finance: Now some of these issues that you’ve just raised, I’m sure you have clients who are not only operating in the US, but globally. How do they then transcend and the issues carry forward around the world?

Steven Steger: The lack of certainty is really an important problem with patent systems generally Where you move globally, different patent systems have different rules, and a lot of the change in the US has come from a lot of the licensing activity that’s been occurring with non-practicing entities or licensing companies. That business model is transferring into other parts of the world, particularly in Europe, and we’re starting to see the beginning of it in Asia as well, and I think as that business model moves into new areas of the world, it may trigger additional changes in those areas as well, which will again lead to more uncertainty.

[W]e are an innovation driven society, or an innovation driven world now, and those innovations need to be able to be freely traded

World Finance: Now let’s look at one particular agreement, now that’s the transatlantic Trade and Investment Partnership, TIP, which is going to be between the US as well as Europe. Now one of the major sticking points of course is intellectual property rights. Can you tell me, how are we ever going to bridge the divide that exists between the two sides of the negotiating table?

Steven Steger: Staying with the same theme, it’s to make sure that there is some certainty around the patent laws, and recognise that a good system needs to have kind of a balancing act between some level of certainty and understanding of what the rules are, what the patents cover, but still the flexibility to address new innovations and new technologies that come online, and new business models that occur. It’s that balancing act of these really conflicting viewpoints of certainty verse flexibility that I think are the key aspects to be addressed in any trade treaty, to allow both of those to occur.

World Finance: Well if I had to negotiate a contract, you’d definitely be a man that I’d want on my side, but what other issues do you see occurring in terms of patent rules on the horizon?

Steven Steger: I think people need to maintain a focus on the fact that innovation is really something that’s traded now, and the patent rights are kind of the basis of what’s traded, or the thing that is traded. But we are an innovation driven society, or an innovation driven world now, and those innovations need to be able to be freely traded, and making sure that patent laws allow for both continuing to incentivise innovation, to allow for the free trade of that innovation is very important as we move into the global economy.

World Finance: Fascinating, Steven Steger, thank you so much for joining us today.

Steven Steger: Thank you.