How do you build an effective IP office in a changing patent landscape?

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

Thomas Edison once said that “vision without execution is hallucination”. That is quite a warning for any organisation assessing its next steps, let alone for one of the world’s largest IP offices developing its next multi-annual workplan. When the European Patent Office (EPO) Strategic Plan is presented to our administrative council in a couple of months, it will represent the vision of how the EPO wants to be in the future and provide the roadmap to execute that vision over the next five years in what can sometimes be a highly changeable environment. With input from stakeholders, the EPO is convinced that it can become a more agile patent office, offering innovative new products and services for all users.

Demand for patent protection has grown steadily in recent years and, according to the latest World Intellectual Property Organisation report, in 2017 patent applications worldwide reached more than 3.16 million. European Patent applications in 2018 also grew by 4.6% compared to the previous year, reaching in excess of 174,000. Nevertheless, within that sustained growth, the patent landscape is continuously evolving. EPO member states experience varying growth rates in applications; technological sectors experience shifting rates of increase; and even patents for medical inventions – which regularly top the charts for the most patented field of technology – have risen at an unsteady rate. In addition, some patented technologies (eg, computer implemented inventions) are becoming cross sectoral and pervasive in more and more technological fields.

On top of all these variations, IP offices are faced with technologies that arrive so quickly, and have such an impact on society, that they are referred to as the ‘next industrial revolution’. Growth and impact are seemingly ubiquitous: personal assistants, marketing and business forecasting are just a few of the many areas now touched by artificial intelligence. The EPO’s latest study on fourth industrial revolution (4IR) technologies attests to that: 5,000 patent applications for inventions relating to autonomous objects were filed at the EPO in 2016 alone, and in the past three years the rate of growth for 4IR patent applications was 54% – to put that into perspective, the overall increase in patent applications at the EPO in the past three years was 7.65%. Meanwhile, these technologies are driving growth in other sectors (eg, autonomous vehicles). A 2018 EPO study on self-driving vehicles in Europe found that patent applications at the EPO for automated driving increased by 330% between 2011 and 2017.

Utilising the IP ecosystem to improve understanding

Fully understanding the environment in which the EPO operates is crucial if we want to provide a patent office that can respond effectively to the needs of its users and if we are to succeed. As a patent office we do not act alone, we are one actor among many in a thriving IP ecosystem, but by liaising with all our partners in this ecosystem we can create a better EPO in two ways. First, this network can help us draw on the collective knowledge of all those involved in intellectual property to improve their understanding of the modern IP landscape, its intricacies and many facets. Second, with comprehensive stakeholder input, we can ensure that the strategic plan which emerges has a more realistic chance of addressing the needs of all the EPO’s stakeholders – for the EPO, that means its member states, patent offices around the world, users in Europe and further afield, as well its staff.

Over the past few months the EPO has been gathering feedback to help draft the Strategic Plan for the next five years. Consultations have been undertaken with EPO member states to get their views on the most prominent challenges to the patent system and how cooperation could be fostered between the EPO and the European Patent Network. Users from around Europe and beyond have also been invited to provide feedback on how the EPO can deliver better products and services. We held an online public consultation for seven weeks to invite input regarding our role as a public, transparent organisation. The feedback has helped us draft a comprehensive and clear plan, and we would like to extend our thanks to all those who have taken part. We have also used external independent consultants to provide two comprehensive audits on EPO information technology and finances, which should help us towards a full digital transformation and greater financial sustainability.

In addition, the EPO has a fundamental responsibility to balance the requirements of external stakeholders with the needs of its staff. Ours is an organisation founded on the expertise of its staff, from the first 100 or so people in 1978, to the nearly 7,000 employees that we have today. The internal fact-finding process started immediately after my arrival in July 2018, with one-to-one meetings with EPO staff members. I have been holding my last few meetings with staff members in the Hague, taking the number of individual meetings with staff to more than 1,000.

This input has been essential for the Strategic Plan. Some of our employees have been in position for nearly 30 years, some for merely months. Their competencies encompass far more than patent examining, ranging from information technology to international affairs; from patent law to procurement; and everything in between. Together, the EPO’s 6,850 staff have an immense volume of institutional knowledge, and many have already provided lucid and convincing proposals on how to better serve EPO users. In addition, a staff survey has been conducted to help identify how we, as a modern patent office, can help our staff to excel, as well as giving staff the opportunity to influence the direction of the EPO.

The journey ahead

Happily, improving the EPO is not a journey that we are starting from scratch. What we are doing now is taking the next steps for an organisation that has already proved itself more than capable of adapting. After the past eight years of reforms at the EPO, it is clear that there have been a number of successes. The institution has continued to provide high-quality patents, kept fees down, developed a wider range of services and is more financially sustainable.

Based on the input received so far, we have identified a number of key areas where we can make improvements, both internal and external. And thanks to your input, we at the EPO have a better understanding of the kind of services that users want as we move forward.

First, it is clear that users want the EPO to be an effective as well as an efficient organisation. Past efficiency drives have helped to keep unit costs in check, fees down and social packages for staff high. However, for the sake of our users, we must now become more effective – doing the right thing, at the right time and in the right way. This policy is expected to include many elements, but we already anticipate that planning and monitoring must be improved in many areas (eg, finance, governance, procurement and controlling). Ensuring that the EPO remains accountable will involve greater transparency across the organisation and with external stakeholders.

While any organisation might aspire to be more effective and transparent, there is one field in particular where the EPO is determined to retain its competitive lead: the quality of our products and services. Since its inception in 1978, the EPO has always aspired to produce legally robust patents. The results of user surveys, the annual IAM survey and feedback in meetings with users have all helped to confirm the EPO’s reputation as a leader in quality.

Given the importance of quality to the EPO and our users, we want to develop a ‘2.0 approach’ through which we will develop new initiatives based on a more nuanced and advanced understanding of the subject. Giving a greater role to our examining divisions, possible greater public scrutiny, enhancing the quality management system and mastering our prior art could all help develop the EPO’s established position as an agenda setter in patent quality. However, the agenda must be based on a common understanding with EPO users, and aligning user perceptions of quality with the EPO’s perceptions will be integral to our efforts.

In the past, the EPO’s cooperation initiatives have also helped it become a world leader in patent information. The dissemination of high-quality data has driven innovation and the transfer of knowledge. We now find ourselves in a world of big data and ‘big prior art’, as rapidly increasing volumes of patent data are produced and fill databases. To manage all this patent information is no small task, but at the EPO we are confident that by upgrading tools and services with new technologies, usability and the user-friendliness of databases can be improved.

The last element that I want to highlight is the importance of cooperation. The EPO was founded on that ideal and we remain convinced that relationships with user groups and international partners will continue to yield strong benefits. Not only can it continue to help manage patent information, but it can help EPO users to access patent protection abroad and strengthen the patent system here in Europe. Cooperation is the pathway to simplification, convergence and predictability, as well as legal certainty – simplification to reduce costs; convergence to facilitate common practices; and increased legal certainty by promoting the same high standards in as many IP offices as possible.

Vision for the next five years and beyond

Promoting these high standards was a part of the EPO’s original vision. Every day, here at the EPO, the vision of our founding fathers is fulfilled as, one by one, we grant high-quality patents for Europe. Now it is our turn, with our current generation of dedicated staff, to see if we can implement an evolution of that vision for the next five years and, hopefully, far beyond. We cannot account for every minute change in the patent landscape, but, with the input of our stakeholders and the expertise of our staff, we can present a strategy that envisages and implements a more agile EPO, which will excel when faced with both the predictable and unpredictable.

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