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Article January 14, 2016

The year ahead for IP

Here at CFC, we’ve been buffing up our crystal ball, consulting our prophetic octopuses and staring fearlessly into the doleful eyes of Father Time to predict what the year ahead will bring for IP.

Will this be the year Apple patent the shiny metal square? Will David Attenborough face lawsuits from irate orangutans for misappropriating their image rights (see: monkey selfie)? Will Donald Trump trademark his toupe? Of course not, don’t be absurd. There are some more prosaic predictions we can make with confidence though:

The European Unitary patent will continue its steady progress into law and be ratified by a number of member states
The European Unitary patent, for those of you who don’t already know, will be the first European wide patent which can be enforced at a European level. Currently European patents operate as a bundle of national patents which must be enforced, challenged and revoked at the national level. This makes enforcing patents in the EU much more costly, especially where there are damaging infringements in multiple jurisdictions and a lawsuit is necessary in each. The Unitary patent has been on the agenda for over seven years now, but 2016 could be a key year in the directives progress: it is the year when the EU’s preparatory committee expects to finish its work, the year when Germany and Britain, the last remaining countries to ratify the agreement, are expected to do so, and the year when companies who wish to have their national patents “opted out” from becoming Unitary patents will have to submit their requests.

Patent reform in the US will revive 
This might seem counter-intuitive with 2016 being an election year when Republicans and Democrats seem polls apart on pretty much every issue imaginable. However, patent reform fails to excite the average voter (who knew?) so has luckily escaped partisan wrangling. Less fortunately, the lack of voter interest and therefore political accountability means lobbyists have an unusually high degree of influence over IP legislation. Lobbyists from different industries are backing various bills in both the house and senate, and some sort of compromise seems a likely outcome for 2016.

IP will become increasingly important in the oil and gas sector
Oil and gas service companies will keep close guard on their IP in the leaner times ahead until the oil price picks up. They will use it to steal a march on their competitors in tender situations with margins growing tighter and increased competition. Aggressive tactics to enforce their IPR will increasingly be on the agenda should any theft of trade secrets or patent infringement come to light. Prevention is better than cure and strategic avoidance and workarounds of third party competitor IPR will be popular themes for 2016.

Patent trolls will adapt and survive 
Its been a tough couple of years for patent trolls. Following the America Invents Act (2010) and the Alice Corp Decision, the value of thousands of NPE-owned patents has been called into question; the billion dollar patent M&As of 2011 and 2012 seem like a thing of the past. Trolls have suffered in the courts too, as Section 101 motions and Inter Pares Reviews begin to cull the thousands of dubious patents they rely upon. Despite all of this, NPE suits have not declined at all, in fact, according to recent data from Unified Patents, they have increased this year by as much as 6%. It appears that patent trolls have adapted their business model to the new legal climate. The underlying premise remains the same – they rely upon high cost of going to court to extract a settlement from their prey. Trolls have simply adjusted their settlement demands to reflect the higher likelihood of their patents being overturned and the reduced costs of seeking a PTAB ruling. Given the astronomical amount of money and patents NPEs have accrued, it is likely that trolls will be prove equally resilient in the face of any new legal challenges in 2016.