Troll-proofing Europe’s patent system

As the European Union moves towards a unified patent system, we’re excited about the prospects for a harmonised patent regime that promotes efficiency and long-term competitiveness.

After all, the whole point of a patent system is to promote innovation. Patents encourage inventors to publicly disclose their inventions, sharing knowledge and spurring further progress while recouping their investment.

But in the United States, the abuse of dubious patents is having the opposite effect, impeding innovation and harming consumers. Patent trolls – litigation shops that use questionable patents to extort money from productive companies—are placing a huge drag on innovation. Trolls use the threat of expensive and extended litigation to extract settlements, regardless of the merits of their claims.

The economic impact of patent troll litigation has been enormous, draining an estimated $29 billion in direct costs from productive enterprises in 2011 alone. Over the years Google has faced down hundreds of patent claims, mostly from patent trolls, but only after paying millions of dollars in legal fees.

Europe now has a clear opportunity to adopt rules that limit the risk of fostering patent trolling in Europe. Patent trolls have no real business interests to defend. So, at the very least, trolls should have to prove their patents are actually valid and consumer harms should be considered before giving trolls blocking orders that would impact 500 million Europeans.

Today, we’ve joined 15 European and U.S. companies, including Adidas, Deutsche Telekom, Apple and Microsoft in an open letter, suggesting improvements to the Unified Patent Court’s proposed rules. These fixes will help the EU system avoid the issues that have plagued the U.S. and will ensure companies are investing in innovation and growth—not patent litigation.

Posted by Catherine Lacavera, Director of Patent Litigation
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Pubblicato in IP

European consumers embrace online content

The Internet has been disruptive for the media industries – film, television, gaming, music, books and news. But it’s now becoming clear that whilst initially painful, this disruption is proving positive, as three recent studies released by Booz & Co, Floor 64 Research, and Boston Consulting Group show. The digital era is starting to benefit both Europe’s content producers and consumers.

Boston Consulting Group’s “Follow the Surplus” report (disclosure: commissioned by Google), published this week reveals growing confidence in online content. Three quarters of consumers surveyed in nine European countries judged that online content had improved in quality, and nearly two thirds expect continued improvement.

The report also noted that two-thirds of respondents value the diversity of information and opinions available to them online, and substantial majorities (as high as 75% in some countries) are more excited about the benefits of the Internet than they are worried about any perceived risks.

This optimism is generating a large ‘consumer surplus’ – the theoretical value consumers attribute to a product or service above and beyond what they paid for it – valued at an average of EUR 1,100 per person per year for online media.

It’s clear too that European consumers are increasingly willing to pay for content. Booz’s report (disclosure: also commissioned by Google) calculates digital revenues at €30 billion higher in 2011 than in 2001. Floor 64’s research shows that in 2007, there were just 11 legal digital music services in Germany, in 2011 there were 68. The British Recorded Music Industry’s recent annual report says UK digital music revenues last year overtook sales or records and CDs for the first time. And according to the International Federation of the Phonographic Industry’s Digital Music Report 2013, digital revenues now account for 34% of total global revenues for the recording industry.

These reports all paint a picture of a large digital opportunity for the creative sectors – and of an industry in the process of reorienting itself to the online world. We’re keen to partner with the creative sectors and answer growing consumer demand for quality online media.

Posted by Simon Morrison, Public Policy Manager, Google
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