Relationships between Claim Structure and the Competitiveness of a Patent

• Author: Takashi Miyazawa; Hiroshi Osada
• Position: Intellectual Property Division, Seiko Epson Corporation, 80 Hirooka, Harashinden, Shiojiri-shi, Nagano-ken 399-0785, JAPAN; Graduate School of Innovation Management, Tokyo Institute of Technology, 3-3-6 Shibaura, Minato-ku, Tokyo 108-0023, JAPAN
• Pages: 132-141

Page 132

1. Introduction

Since various technologies are required to manufacture products in several key industries such as semiconductors and electronics, patents necessary to manufacture the products are prone to be owned by multiple patentees. This situation is called a 'patent thicket'. Market participants fret that their new products could infringe on patents issued after these products are designed and go on sale in the patent thicket. Cross-license is a natural and effective method used by the market participants to cut through the patent thicket (Shapiro, 2001). Nagaoka and Kwon have found cross-license plays an important role especially in the electronics industry of Japan (2003).

However, the rise of emerging 'fablesses' in developing nations has brought a fierce competition (Lu, Hung and Yang, 2004). This has a major impact on the business approach which places value on cross-license. 'Fabless' means a company which has no manufacturing facilities. The emerging 'fablesses' have grown remarkably in the past decade by specializing in the design and sale of products and putting new products into markets expeditiously, utilizing their mobility as a great advantage in addition to competitive prices. In fact, many of the emerging fablesses have begun to deprive many Japanese companies of their market shares. The emerging fablesses tend to have insufficient patent rights because considerable time is required to establish a portfolio of patent rights. This has led to interference with the traditional cross-license model. Japanese companies are facing a need for enforcement of patent rights than ever before in order to secure their business and profits in this emerging business environment. Enforcement of patent rights often leads to conflict with the party against whom patent right is to be enforced, so it is more crucial for companies to own a competitive patent rather than great number of patents, although the number of patents has been emphasized in the cross-license model (Onishi and Okada, 2005). A competitive patent enables to dominate its maximal technological scope and to exclude competitors from the scope even if they infringe actually the scope. In other words, the recent fierce competition in which enforcement of patent rights is often required to utilize to defeat an adversary has shifted the emphasis of patent from macro perspectives such as the number of patents to micro perspectives such as the competitiveness of a patent.

However, the emphasis has hitherto placed on patent value, which is usually evaluated from the economic or financial point of view, rather than the competitiveness of a patent. There have been many studies on patent values (Ernst, 1998; Ernst, 2001; Hall and Ziedonis, 2001; Hirschey and Richardson, 2001; Hirschey and Richardson, 2004; Lanjouw and Schankerman, 2004). Most of these studies relate to indicators extracted from bibliographic information such as forward citations, backward citations, science linkage, the number of inventors, and family size. Reitzig (2004) shows that the probability of an opposition against a patent can be an indicator of its value. Most of such existing indicators are determined after filing a patent application or decision to grant a patent. Thus it is difficult to use them as tools for improving patent values during patent prosecution process.

Even if the invention is of high quality, unskilful patent practice may nullify its competitiveness. Even negligent slips in claims, specification and prosecution may lead to the patent enforcement claim being defeated or to a weakening of the position of its owner in settlement negotiations. There is a high correlation between the competitiveness of a patent and the activities of patent practitioners in the prosecution process. As shown in Figure Page 133 1, which shows prosecution process from the creation of an invention to a decision to grant a patent, a practitioner first prepares a patent application. The preparation of a patent application, which is reflected in claims and a specification of a patent application at the time of filing of the patent application, is especially crucial since Japanese Patent Law, as with other major patent laws such as European Patent Law and Chinese Patent Law, imposes tight restrictions on amendments of claims after filing a patent application. Nonconforming amendments often preclude enforcement of patent rights.

Figure 1. Typical prosecution process from creation of an invention to a decision to grant a patent.

(Figure in Pdf File)

In this respect, the paper titled 'Quality of patent specifications that enable to enforce the patent rights' appeared in a journal issued by Japan intellectual property association (the second subcommittee of the second patent committee of Japan intellectual property association, 2006). This paper proposes a checklist including following characteristic features: target definition (1); verifiability of patent infringement (2); inevitability in utilization (3); ease of royalty estimation (4); ease of comparison (5); unambiguity of technical terms (6); ability to be understood (7); thoroughness of embodiment description (8); logical consistency (9); clarity of technological description (10); fairness (11); appropriateness of disclosure of prior arts (12); and ease of implementation (13). This checklist can be applied to patent practice until filing of a patent application such as preparation of a patent application.

However, since many of these characteristic features are those which pertain to a specification of a patent application other than claims, the checklist demands an immense amount of time and effort to fully use it and is difficult to utilize in a limited time of the preparation of a patent application from a practical standpoint. Further, results of this checklist are influenced by user's ability or subjective view because it is difficult to assess quantitatively these characteristic features.

Therefore, we focus on 'claim structure' at the time of filing of a patent application. Claim structure means herein overlap between claims and operational breadth of the claims quantified by plural parameters such as those described in the following section. By analyzing claim structure quantitatively with such parameters, we expect to obtain objective knowledge regarding the competitiveness of a patent. The obtained objective knowledge is expected to develop tools for obtaining a competitive patent.

The paper is organized as follows: the next section outlines the data and methodology. In particular, this study picks up patent applications involved with patent infringement lawsuits and analyzes claim structures in relation to their victories and defeats, which is one of the tangible outcomes of the competitiveness of a patent. Parameters used to analyze claim structure are also described. The parameters include the total number of independent claims, which stand on their own and do not quote other claims. The third section presents results obtained by analyzing claim structures. The main finding is that the total number of independent claims increases with the number of references regarding patent applications for patents court-affirmed to be infringed (winning patents), but does not in the patent applications for patents court-affirmed not to be infringed (losing patents). A further finding is that there is differences in the average ratio of the number of references divided by the number of the independent claims between the patent applications for the winning patents and those for the losing patents. The fourth section deals with explanations for the obtained results. The last section summarizes our conclusions.

2. Data and methodology

In order to investigate claim structure, this study pays attention to the following parameters:

* the total number of claims (i);

* the total number of claim categories (j); Page 134

* the total number of...