Why patent ownership data accuracy is a $300 billion problem worth solving
Who owns the world’s patents? No-one can be sure. The World Intellectual Property Organisation (WIPO) believes that 25% of the patent ownership data available on public registers is inaccurate. There are an estimated 20 million in-force patents and pending applications around the world, which suggests that patent registry data relating to ownership is inaccurate for 5 million of them.
Without clear-cut ownership information, the full value of intellectual property (IP) as an asset cannot be realised. ORoPO is a not-for-profit open register of patent ownership information that sets out to complement the work of Patent Offices worldwide. Established in 2015 with the support of companies including IBM, Microsoft and ARM, ORoPO aims to directly address the issue of non-verified data. It encourages companies to publish details of IP ownership to ORoPO’s global register of patents and update this when ownership changes. With our support and the support of patent owners and financial markets, ORoPO’s initiative will make a significant contribution to transparency of patent information.
The value of IP
Previously viewed as legal instruments that had little influence on wider business strategy, patents have emerged as genuine business assets. Patents can now account for up to 70% of enterprise asset value, displacing more tangible assets such as real estate or machinery.
Patents are even driving large corporate deals - for example, AOL selling and licensing a bundle of patents to Microsoft for $1.1 billion and Google buying Motorola Mobility for $12.5 billion, then selling the business to Lenovo without the patents in June 2014 for $2.91 billion.
The problem with patent data
Why are we now striving for a transparent patent database? The answer is simple - inaccuracies in patent ownership have significant consequences. Inaccurate data harms patent owners by increasing risk, cost and uncertainty. Even transactions will not occur as efficiently, requiring more money and time to complete.
Patent Offices perform a vital function – protecting and managing the IP rights of innovators. Yet the overall regulatory framework that surrounds them can struggle to measure up. Today’s patent data is not satisfactory, as is the nature of many datasets that have evolved from systems that have been in place for hundreds of years. The patent system should be more integrated and offer a centralised way to manage patent ownership on an international scale – something that is increasingly important in today’s globalised economy.
With IP making up as much as 70% of a company’s value, inaccurate information can fundamentally impact on the core asset value of a business.
ORoPO is a practical solution for a fundamental issue. With improved transparency our marketplace will work more effectively, allowing innovators to make smarter investments, create more jobs, and drive economic growth.
Greater transparency around ownership even has the potential to benefit economies on a global scale. With an increased awareness of technologies, there will be more opportunities for licensing across borders. While a clearer indication of who owns what will also drive a better idea of which businesses should collaborate with each other. ORoPO believes that this could stimulate an incredible $300 billion in untapped economic value – making the initiative potentially one of the most simple but effective ways to grow the global economy.
A more accurate and transparent database of patent ownership has the potential to transform the future of IP for the better. By actively publicising ORoPO to our global customer base, we aim to encourage organisations to submit their patent data to grow the ORoPO network and database.
Interested in learning more about the ORoPO initiative? Register for the ‘Benefits of Transparency in Patent Ownership’ webinar with guest speakers from ORoPO and IBM. You can also read a report by ORoPO on ‘Who Owns the World’s Patents?’ here.