Governmental initiative to assist domestic companies in IP litigations

Due to the number of litigations that are directed towards Taiwanese companies, the government has decided to set up an “Intellectual Property bank” that has the purpose to “collect and review patent information to establish a patent database; to provide advice to members on whether the relevant patents may be useful for pending or future cases; to buy patents that will be beneficial to domestic companies in the international market, and then license them to members…”[1]

The IP bank is scheduled to be set up in June 2011 under the supervision of Taiwan’s Industrial Technology Research Institute. The goal is to collect funds from sources such as venture capital and from membership fees and from that fund the service of the IP bank.

One could question if this is the right way to manage the problems with patent litigations and if it is the government’s responsibility to do so?

The title of this year’s CIP Forum is “The new wealth of nations” and as one can observe, IP has been lifted up on the agenda for many governments. The acknowledgement of IP is of course important, however one could question if governments should act on behalf of companies in the above-mentioned way. If this were to spread to other countries and governments, will governments only purchase patents and then license them to domestic companies or will licensing become a new revenue stream for countries or will we see governments as parties in patent litigations? According to IAM[2], Taiwan is the third Asian country that is setting up this kind of structure to purchase patents in order to strengthen domestic companies; Korea and China are the other two actors that have announced similar actions. What will happen if this trends is to become standard behavior for countries in order to protect domestic companies from being sued? One can also question if this strategy will work at all. According to the IAM blog post, the bank is aiming for gathering funds up to 18 million USD. This is a rather small amount when considering what valuable patent portfolios are traded for today. The impact that this initiative will have might not be what they are aiming for but it still raises some interesting questions regarding the use of IP and the patent system.

There are no straight answers to these questions but I would encourage you all to comment on this and write your thoughts around this new trend!

David Grünbaum, ICM Class of 2011