Infringements on inventors’ and small enterprises’ patents Causes, effects and a possible cure

Abstract

Individual inventors and small enterprises can rarely enforce their patents from infringement by large ent erprises. They are also vulnerable to aggressive takeovers, which often result in the loss of their patents and financial problems. In most of these cases, predominantly larger firms use their financial strength to avoid paying for patented technical solut ions, ultimately exhausting the individual inventor or SE. The main reason these two strategies work for large companies is that the inventor or SE does not have the financial means to sufficiently finance legal processes throughout appeals. This forces th e financially weaker actor to settle or accept the infringement. This causes problems, not only for individual inventors and small actors, but also for society as a whole. If inventors and small enterprises are unable to profit from their inventions, many of the incentives and conditions for inventing are removed. With fewer inventions and fewer start‐ups, the economy may suffer on many levels. It has been established in a study sponsored by the EU Commission that infringement on small firms’ patents is a f requent phenomenon. Therefore, the issue of frequency of the phenomenon is left out of this study. This is a qualitative study, investigating a phenomenon, its causes and effects, and suggesting a possible cure. Being a master’s thesis from a technological university, the thesis has a constructive approach, aiming not only to investigate the problem, but also to suggest a possible cure. The primary sources of information are scientific research and interviews with patent holders who have been affected by pa tent infringement and aggressive takeover. The case studies are primarily based on interviews with inventors. Since the study focuses on the problem that individual inventors and SEs experience, less emphasis has been given to the large corporations’ side of the story. The possible cure takes the form of a Patent Protection Initiative (PPI), where solid financial strength and organizational features makes it possible to enforce patents and deter large companies from infringing, thereby increasing the incent ives for successful licensing agreements. The PPI will select specific, valuable and enforceable patents, and assert those against predator firms. The operations will be financed through retaining a percentage of license fees from patents and damages awar ded in litigation cases.