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Patents in a recession

Written by Tim Mount on 17 April 2009

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I was back in Blighty two days before the flood (a colleague of mine left a day later and I'm sure he left his hotel room tap on) but at a recent patent conference in Venice we were honoured to be addressed by Alison Brimelow, head honcho at the European Patent Office.

Her reassuring opinion was that based on the last recession and as a trend, patents are extremely resilient to economic slowdown - as inventive thought can provide new revenue when traditional streams are withering and as firms protect themselves. Information from the US appears to confirm this.

It's probably recognised fairly widely that whilst the UK may be in a credit crunch and facing a long-term banking re-evaluation, the US is in recession. This being the case it may strike some as surprising that the US is simultaneously experiencing a wave of patent litigation, and that in tandem companies are on a patent shopping spree being driven by this same recessionary economy.

A recent Reuters report states that even in a tough market for selling IP, patents can often yield much-needed cash as companies seek to avoid bankruptcy or as creditors attempt to maximize the funds they can recover. The report quotes Stephen Gray, a Managing Partner at restructuring firm CRG Partners, as saying that when it comes to patents, "You never know what they're going to be worth, or how they're going to be monetized." They just cannot spell can they.

A slowed US economy has pushed companies to become rigorous in protecting their ideas and find ways to expand and generate revenue, expanding and consolidating their patent portrfolio. This includes companies buying patents as defences against high-stakes litigation. It is a truism in patent litigation that the best form of defence is often attack.

In difficult times businesses need to be more protective about their patents and other rights. In addition they need to be on the lookout for new streams of untapped revenue.

The man who invents the boat in a flood is king. Or should that metaphor relate to drought?

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