If you thought the last decade was revolutionary, you ain’t seen nothing yet
Looking back on 10 years of flux in the market and predicting what the 2020s might hold
And so the 2020s begin. Looking back on the last 10 years the next decade will be quite something if it outdoes them for change in the IP world. But my guess is that this is exactly what will happen. In fact, if anything, I think that there will be more developments in the next decade than there were in the last.
Looking back to this time in 2010, the smartphone wars were in full cry, but we had not yet had the Nortel auction or the America Invents Act. Both were seismic events, but the latter far outweighed the former with regard to long-term importance.
Along with a string of Supreme Court judgments that culminated in Alice Corp v CLS Bank International in 2014, the creation of the PTAB has played a major role in reshaping US – and international – IP markets and reducing the monetary value of patents.
The consequences of the America Invents Act and Alice were that many of the patent-based business models that were so successful at the start of the 2010s have now been largely abandoned or significantly modified. Corporate IP departments have had to rethink the way in which they approach intellectual property, which has had a far-reaching effect on third parties – from lawyers, through brokers to reverse engineering businesses and many others – that offer services to them.
This is probably no bad thing – there should always be a lot more to patents than straight monetisation. That said, other effects of the America Invents Act and Alice, which have been to deliver even greater advantages to deep-pocket patent infringers, have undoubtedly been far less welcome.
What made the America Invents Act and Alice even more consequential was the lack of leadership shown by the USPTO between 2013 and 2017. David Kappos, who as director of the agency ushered in the act, departed the scene at the start of Barack Obama’s second term. For the next two years he had no permanent replacement, until Michelle Lee (formerly of Google) was confirmed in the role in January 2015. Lee’s many qualities did not include a heartfelt attachment to strong patents. It is hard to believe that Kappos would have shared her laissez-faire approach to the fallouts of the PTAB or Alice.
The USPTO also let things slip on the international front, leaving big leadership gaps for the Chinese and the European authorities to walk into. This shift in power would have probably happened anyway, but under the leadership of Benoît Battistelli the EPO took full advantage of the United States’ introspection to establish a strong European voice in international patent decision making. However, it was not only this. European courts, especially those in Germany and latterly in England, became much more interesting to patent holders.
All this has also allowed Europe to become key to the development of licensing practices around SEPs – something of huge importance given the emergence of 3G, 4G and now 5G. The European Court of Justice’s Huawei v ZTE decision remains the single most important ruling handed down anywhere in the world in this area, and courts across Europe have since been interpreting it largely in ways that favour rights holders. Surely in the 2020s, the United States will be doing all it can to become a crucial part of the conversation once more.
Of course, we are seeing the Chinese courts already beginning to do this. And that is just one aspect of the remarkable rise in the country’s patent influence over the last 10 years. China’s market, its companies and its ambitions have all grown in size and scope. There are more active patents in China than anywhere else – though many may be of dubious quality – and there is more patent litigation. This matters. A lot. China is only going to get more influential over the coming decade, whatever the outcome of the current trade war it is fighting with the Trump administration.
China’s continued rise in importance is an easy prediction to make for the next decade. But other developments seem clear, too. Among the most significant are commoditisation and politicisation.
Today, the world is richer than it has ever been before, while technology has become easier and cheaper to duplicate. This is pushing patents down the trademark route and will have a considerable impact on rights holders’ protection strategies, bringing regions such as Latin America, sub-Saharan Africa and Southeast Asia more into play. It is already happening in areas such as mobile communications.
The ongoing politicisation of patents will also accelerate, particularly because issues will become a lot more global. Again, this is something that those in the life sciences have been dealing with for a while, but it is going to become much more marked in high tech. Silicon Valley has enjoyed huge success in curtailing the US patent regime and clearly has its sights set on Europe, too.
Across the world, meanwhile, regulatory authorities are taking an ever-keener look at the intersection between patents and antitrust. It is certain that with the advent of 5G and the Internet of Things this will only increase.
Above all else, though, what is going to shape the patent world over the coming decade is the growing influence of data and AI. Much more of the former is being created and then manipulated in far more sophisticated ways, making AI ever more powerful.
One thing looks certain to me, though: while the structures and roles of corporate IP functions, patent issuing agencies and law firm IP groups from 2010 to 2011 would be easily recognisable today, those of 2030 to 2031 will look extremely different. That, above all else, is what everyone reading this piece should be thinking about as the new decade begins.