Moores, Alexander E --- "The Future of the Patent System" [2013] UTasLawRw 19; (2013) 32(2) University of Tasmania Law Review 358

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Book Reviews

The Future of the Patent System

Ryo Shimanami (ed)

United States of America: Edward Elgar Publishing Limited, 2012, pp 379, ISBN 9781781000533, $160.00.

The Future of the Patent System, edited by Ryo Shimanami, is an examination of the patent system across several key jurisdictions globally, with a focus on Japan and its goal to become an ‘intellectual property nation.’ This collection of articles and essays analyses systems and statistics from both a jurisprudential perspective and with the assistance of economic modelling and surveys. This allows the various contributors to identify both what the issues are and the scale of their impact on the behaviour of players in the patent market. It also provides an insight into the motivation of nations to place so much emphasis on intellectual property (‘IP’), such as Japan’s lack of natural resources and primary industry.

The book first outlines the general challenges and successes of the patent system before then moving into an in-depth examination of the development of patent systems in various emerging jurisdictions such as China, Brazil, and Japan. Part I examines the essence and functions of the patent system, including the current doctrinal foundations from both a legal and economic perspective. Part II focuses on the trilateral area of Europe, the United States and Japan, and the future of their patent systems. Part III widens the scope and analyses developing countries and the future of their systems.

Before the individual and targeted analysis begins, The Future of the Patent System outlines in very broad terms many of the key issues faced by patent systems as a result of changes in technology and the increasing scale of products in the modern market compared to when most patent schemes were introduced. As is common with discourse on patent law, no doubt due to their complexity, relatively young industries, and the amount of litigation that has already occurred, pharmaceuticals and telecommunications/electronics are the primary exemplars of each argument and are used effectively throughout.

Prefacing the main text, Yoichi Omori of the Institute of Intellectual Property identifies key problems to the existing system, which he frames as ‘failures to catch up’, setting the stage for the contributors to identify solutions and challenges in the global context. The argument identifies five clear failings: (1) the inability of the system to adjust to changes in the industrial sector; (2) its inability to cope with the increasing significance of the technology sector and (3) the mode by which this technology is developed; (4) the system’s lack of a current and modernised raison d’etre; and (5) the problem of the system in coping with growing fields to which patents can apply.

The Future of the Patent System does not examine the flaws in patent systems out of context. Throughout the text, contributors identify the risks which are likely to result unless governments legislate changes to their existing regimes. These range from the more obvious risks such as lawsuits and companies’ inability to produce goods for fear of infringement, to the more complex risks such as explosive growth of upstream patents stymieing downstream research and development activities. The ever-present concern is that the complexity of patent law leads to companies manufacturing and distributing products, only to subsequently have their patents found to be invalid, leading to often irreparable damage to the corporate bottom line. The criticisms of the system are given a more than theoretical dimension by this context.

While the book provides a comprehensive examination of some of the challenges for the patent system that are inherent within it, there is no detailed analysis of other legal frameworks that may impact on patent law. These other areas include the systems’ interaction with equity in relation to remedies for breach, and the dichotomy between competition/anti-trust law and the granting of exclusive rights through patents. The latter is a field that has been analysed widely by various authors and government reports worldwide. Without this analysis it seems in parts that the author is attributing particular challenges to the patent system itself, rather than allowing for the possibility that it is the framework as a whole, balancing various legal interests, that create conflict.

The omission relating to competition law is the most notable. Competition does feature in relation to some of the factors that have led to a review of the patent system in several jurisdictions – patent thickets and the self-regulatory solution of patent pooling, for example – but not as an inherent contradiction that can pose the challenge of granting seemingly mutually exclusive legal rights. As The Future of the Patent System mainly analyses IP from the perspective of how national governments and transnational corporate entities engage with the patents system, it is an omission that leads to an incomplete picture of the origin of various corporate decisions surrounding IP.

One of the most interesting components of The Future of the Patent System is an examination by Mark Lemley of the fact that people, particularly the bigger corporate entities in a market, are simply ignoring patents. It is one of the shortest sections and is placed in the text in a way that suggests the editor did not want to give it particular prominence. However, Lemley’s point is not that patents are being ignored and that proves the system needs a complete overhaul, but instead that despite patent frameworks being ignored in some jurisdictions there appears to be no problem with infringement. In just a few brief pages, the author proffers the interesting and profound suggestion that perhaps the patent system has become so complex and contradictory that removing it completely would assist invention and innovation.

To support this point, Lemley cites technological development – linking in with the prefatory comments on failings of the system – as one sector where the patent thicket has become so complex that there is an emerging mutual disregard for the patents of other companies. It is rare that one consumable product will translate to one patent, and many of the 2.5 million patents issued by the United States in the last 20 years are constituent components of products on the market. This makes avoiding infringement especially difficult. In addition, there are numerous exceptions to breaches of patents which make litigation costly for all involved. That said, Lemley does suggest some possible ways the system might adapt, and his short addition to the main text is thoroughly researched allowing for further reading.

The Future of the Patent System is a well-considered mix of legal and economic analysis, which is required to effectively examine trends in IP. The author concentrates on the system itself and only brushes the surface of how the actions of corporate players affect the system, but for those interested in how governments and legislatures attempt to address changing technology it is an excellent insight into the importance and place of IP in national legal systems. Its insight into developing nations, and their motivations for working towards strong global patent enforcement, is particularly expansive and provides a comprehensive analysis of the issues involved.

Alexander E Moores^[∗]

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^[∗] Final-year BA- LLB student at the University of Tasmania, and Board Member of the University of Tasmania Law Review for 2013.