Preserve patent rights that help make pandemic life bearable

Patents and patent licensing have ensured technologies like videoconferencing and streaming services could evolve to cope with the pandemic
As countries consider their economic futures, they must recognise the need for a healthy patent marketplace to ensure continued innovation

Andy Sherman

Published: 2:30pm, 5 Jan 2022

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Sophisticated, internet-enabled audiovisual technologies, once a niche reserved for gamers and videophiles, have been gaining mainstream acceptance for some time, but the outbreak of Covid-19 kicked adoption into overdrive.

Now, grandparents use videoconferencing to show up for birthdays. Students live-stream their classes, and doctors rely on smartphones to examine their patients remotely. At the end of the day, many of us relax with streaming services such as Netflix.

Today, internet-enabled audiovisual tech isn’t just everywhere – it’s essential. Without thinking much about it, most people figure we are lucky to have had such advanced technology when the pandemic broke out.

But luck has nothing to do with it. Patents and patent licensing helped these technologies meet the moment. As we emerge from the pandemic, policymakers should recognise how the patent marketplace helped countless people and businesses survive and even thrive.

The argument for strong patent rights has been the same for centuries: entrepreneurs and innovators won’t invest the resources necessary to invent if their discoveries can be immediately copied. We encourage and reward inventors by giving them limited legal exclusivity to their inventions via the patent.

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There is little question that, without patents, many of the audiovisual technologies we have come to rely on during the past two years would not exist. But there is a puzzle in this story.

Just a few years ago, audiovisual technology would not have been able to accommodate our pandemic needs. If inventors can use patents to stop others from using their inventions, how is it that all of these companies improved their audiovisual technology in similar ways, seemingly all at once?

Given the fierce competition between companies in areas such as video streaming or video calls, that kind of synchrony shouldn’t be possible. Enter the patent marketplace – a vast network of lawyers and businesspeople working behind the scenes to funnel hi-tech solutions to real-world problems.

Every day, the marketplace facilitates countless transactions in which patent owners grant users the right to use their inventions. To help tech solutions reach as many people as possible, the marketplace enables owners to slice and dice their patent rights.

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For instance, say an inventor creates a new, patentable compression technology that streams audio more clearly. Rather than licensing the invention exclusively or selling it, the inventor can choose to license to one company in South Korea and to another in Japan.

They can allow one company to use the invention for music streaming and another to use it for videoconferencing. They can even grant non-exclusive licences that allow multiple companies to use the same rights in the same ways. In this way, a patented technology can quickly find its way into the hands of everyone who would benefit.

Of course, as audiovisual technology grows more complex, even one technology can combine the patented inventions of multiple inventors. This poses a problem for potential licensees who don’t want to get buried in a never-ending series of licence agreements.

The patent marketplace has devised a solution here, too. Patent owners can join together to form a patent pool – an entity that collects most or all of the rights in one place and licenses these rights to users in one transaction.

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Patent pools are efficient, saving millions in transaction costs. In doing so, they have helped make revolutionary audiovisual technologies easier to license and more widespread than they would be otherwise. This benefits the public in the form of better entertainment and communications experiences.

For the patent marketplace to continue to function, policymakers must do their part to ensure strong patent protections and confidence in the enforceability of licensing agreements.

In the wake of the debate over the Covid-19 vaccine, it’s increasingly common for patent licensing fees to be viewed negatively – and some support waiving patent rights altogether. These views are strategically shortsighted. An inventor who feels uncertain about potential profitability is less likely to invest in research and development. Those who continue to develop inventions will be less likely to license their patent rights if there is doubt about enforceability.

We would end up with fewer inventions spread less widely. That is a losing scenario for inventors, patent licensees and society.

For example, without a vibrant and collaborative IP marketplace, fewer companies would have been able to offer workable videoconferencing during the pandemic. That would have created a choke point for high-volume users such as schools, businesses and health care providers.

As countries around the world consider their economic futures, they must recognise the necessity of a healthy patent marketplace. If we want to ensure the kinds of innovations that have made the past two years bearable, we shouldn’t kill the golden goose that made them happen.

Andy Sherman is executive vice-president, general counsel and corporate secretary at Dolby

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