Patents 2019: Trends & Conclusions

With the role of intellectual property in the economy increasing every year, the patents space continues to be an active one for lawyers. There has now been nine years of year-on-year growth in the number of patent filings globally. Amid this activity, a number of key trends have been highlighted over the course of our research.

New kids on the block

Traditionally, the life sciences and technology sectors have dominated the patents space; however, many practitioners we spoke to noted that this may be starting to change. As far as our sources were concerned, “nothing will disrupt the significance of the life sciences and tech sectors in patents law”, but they also observe “signs that other things are beginning to enter” the market. One area that has witnessed growing interest over recent months has been the automotive sector. Although much of the fanfare has surrounded the possibility of self-driving cars, for lawyers in the space, the real excitement has centred on the growing intelligence within cars. The increasing prevalence of the internet of things and car manufacturers’ desire to produce greater safety and usability for consumers has given rise to a new breed of car that offers a more comprehensive interface for drivers. The number of filings with the European Patent Office (EPO) grew over the past year by 4.6 per cent, with much to suggest that this is driven by innovations in the automotive sector.

It is not just the automotive sector that has witnessed new development in recent months. The financial sector has for some time been home to a strengthening fintech sub-sector. Practitioners around the globe highlighted this as an area that has been fuelling workloads over the past 12 months. In Singapore for instance, the need for a quick turnaround on patent filings was recognised early on by regulators. Sources we spoke to stated that “the Intellectual Property Office of Singapore (IPOS) is very aware of new technologies and the need for innovation”, with a new scheme in place since December 2018 that enables fintech patents to be fast-tracked.  

The optimism surrounding financial tech appears to be receiving a mixed response when it comes to blockchain, however. The tech and operations chief at Bank of America (the financial firm with more blockchain patents than any other), Cathy Bessant, recently cast very public doubt on the commercial value of blockchain. The lawyers we interviewed noted that interest remains from clients, arguing that “blockchain will be disruptive in the financial service industry”. Whether this comes to pass remains to be seen, but what is clear is that practitioners close to the sector will be kept busy over the coming months as firms continue to back the technology – at least into the near future.

Groundhog Day for the Unified Patent Court (UPC)

In our last trends piece, we discussed the ongoing preparations by European firms for “the coming of the UPC”. A year on, we continue to await its arrival. The constitutional complaint that has halted Germany’s ratification of the UPC remains unresolved (a decision is expected sometime this year) and uncertainty continues over Brexit. Despite this, the practitioners we spoke to in the UK remain optimistic. One source told us that “despite people saying that it will be impossible to participate” they are “quite excited about the UPC as it will allow more efficient and effective litigation for clients”. This view is not held by everyone. The ongoing delays and the lack of clarity around the UK’s position post-Brexit has led, according to one interviewee, to “everyone now more or less accepting that the UPC is unlikely to happen in the near future”.  The future of the UPC remains as unclear as the path it has taken to its emergence. Readers are invited to check back in 12 months’ time for updates.

The “post-Alice World” gets curiouser and curiouser)

The USA has historically been a teeming cauldron of litigiousness. Until recently, that is. Lawyers we spoke to stated that “litigation continues to be spikey” but a number of factors have coalesced in recent months and years that are reshaping the US patent market. One such factor has been the US Supreme Court case of Alice Corp v CLS Bank regarding unpatentable subject matter. The decision has decimated the role of patent trolls, with hundreds of dubious patents being thrown out in the wake of the Supreme Court’s decision. Some argue that this has been beneficial for innovation in the technology sector, with firms now able to press ahead with products without the threat of onerous litigation.

The honeymoon period for the decision appears now to be over. Five years on, sources note that “the pendulum appears to have swung too far the opposite way now”. Practitioners complain that there is continuing uncertainty regarding their ability to challenge technology patents in the computer software space. We are now living in what one practitioner refers to as a “post-Alice world” that cannot be fixed without some kind of legislative intervention. This intervention appears to be on the horizon now, with lawmakers already discussing how best to add clarity to the existing definition of what is patentable. How this plays out for US practitioners is unclear. The dip in the amount of litigation has certainly reduced caseloads for some. However, the ongoing uncertainty and the likelihood of legislative change means that advisory work should give a boost to practitioners in the jurisdiction.

Good morning, London

Few law firms are unaware of the burgeoning importance of intellectual property in the modern economy. This awareness is creating a gold rush among law firms to involve themselves in the space. Our research highlights a broad range of firms involved in different markets, with a healthy mix of full-service and specialist patent firms providing clients with expertise on different issues.

One significant outcome of the changes in the US market has been an influx of American law firms into the UK market. As the pool of litigation has dried up in the US, practitioners in London have noticed a strong push by US firms to gain market share in the City. Kirkland & Ellis’ hire of three well-established practitioners from Allen & Overy is but one such example of their rising influence. For the time being there is, according to all parties that we spoke to, plenty of work to go around. It will be interesting to see how this plays out for foreign firms. With the profit margin of European litigation traditionally being lower than across the pond, the market could prove a tough nut to crack.

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