EN

Analysis of patenting activities

of FP7 NMP projects

Tender RTD-NMP-2013-patents

Final Report

EUROPEAN COMMISSION

Directorate-General for Research and Innovation Directorate D – Key Enabling Technologies Unit D.1 – Strategy

Contact: Doris Schröcker

E-mail: doris.schroecker@ec.europa.eu RTD-PUBLICATIONS@ec.europa.eu

European Commission B-1049 Brussels

mailto:RTD-PUBLICATIONS@ec.europa.eu

EUROPEAN COMMISSION

Analysis of patenting activities

of FP7 NMP projects

Tender RTD-NMP-2013-patents

Final Report

Authors:

Julie Callaert * (KU Leuven)

Hanne Peeters (KU Leuven) Xiaoyan Song (KU Leuven)

Bart Van Looy (KU Leuven)

Annelies Wastyn (Idea Consult) Pieterjan Debergh (Idea Consult)

Jos J. Winninck (CWTS Leiden)

Robert J.W. Tijssen (CWTS Leiden)

* Contact: julie.callaert@kuleuven.be

Directorate-General for Research and Innovation 2015 Key Enabling Technologies EN

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Luxembourg: Publications Office of the European Union, 2015.

ISBN : 978-92-79-46619-9 doi: 10.2777/600483

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Contents

EXECUTIVE SUMMARY .................................................................................................... 7

CHAPTER 1 – INTRODUCTION ......................................................................................... 9

Policy context ........................................................................................................ 9

Existing evidence about the impact of EU Framework Programmes ............................... 9

Study objectives .................................................................................................. 10

Guide to the reader .............................................................................................. 11

CHAPTER 2 – IP PRACTICES IN THE NMP CONTEXT ......................................................... 11

IP strategies in general ......................................................................................... 11

NMP field specificities and potential implications for IP strategies within NMP ............... 12

Conclusion .......................................................................................................... 13

CHAPTER 3 – DATA & METHODOLOGICAL APPROACH ...................................................... 14

Quantitative approach: bridging FP7 NMP project data and patent data ...................... 14

Qualitative approach: Survey and interview methodology ......................................... 17

CHAPTER 4 – MAPPING OF PATENTS WITHIN FP7 NMP PROJECTS ..................................... 18

The role of patents as IP protection mechanism within FP7 NMP projects .................... 18

SESAM registration of patenting activities from FP7 NMP projects: the full picture? ...... 21

Characterisation of FP7 NMP project related patents ................................................. 25

Science linkage of NMP project-related patents ........................................................ 29

Benchmarking FP7 NMP project-related patents against non-project related patents .... 32

Conclusion .......................................................................................................... 34

CHAPTER 5 – MAPPING OF PROJECT CHARACTERISTICS .................................................. 34

FP7 NMP project characteristics ............................................................................. 34

IP allocation agreements in FP7 NMP projects .......................................................... 36

Relation between project characteristics and patent characteristics ............................ 38

Conclusion .......................................................................................................... 39

CHAPTER 6 – CONCLUSIONS AND RECOMMENDATIONS ................................................... 39

Conclusion: synthesis of findings ........................................................................... 39

Recommendations - Monitoring innovative outputs of FP7 NMP projects: towards best practice? ................................................................................................... 41

REFERENCE LIST ......................................................................................................... 45

ANNEX 1 – SURVEY AND INTERVIEW INSTRUMENTS ....................................................... 47

ANNEX 1a: Survey among patenting NMP project participants ................................... 47

ANNEX 1b: Survey among non-patenting NMP project participants ............................. 50

ANNEX 2 – MAPPING OF PATENT CHARACTERISTICS ....................................................... 55

ANNEX 3 – SUB-PROGRAMME BREAKDOWN TABLES ........................................................ 59

ANNEX 4 – STATISTICAL TABLES: RELATION BETWEEN PROJECT CHARACTERISTICS AND PATENT CHARACTERISTICS................................................................................... 69

SUMMARY .................................................................................................................. 74

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EXECUTIVE SUMMARY

This study assesses patents as the most commonly used indicator for measuring the innovative

output of FP7 projects in the field of “Nanosciences, Nanotechnologies, Materials and New Production Technologies” (NMP) in the Seventh Framework Programme for Research (FP7). Quantitative analyses of NMP related patent data are complemented with surveys and interviews, conducted among FP7 NMP project coordinators, to answer the following three questions:

(1) How appropriate are patent data for measuring innovation resulting from FP7 NMP projects? (2) How accurate is the information on patent applications reported by FP7 NMP projects in the

European Commission’s SESAM database? (3) Are FP7 NMP related patents different from non-FP7 related patents in NMP?

The study reveals that patents are a highly relevant but incomplete indicator of the innovative output of FP7 NMP projects. A more comprehensive assessment of innovation outcomes from NMP

projects will result from including information on trademarks, registered designs and scientific publications in order to grasp the variety of intellectual property (IP) mechanisms and strategies

being deployed. In the field of NMP, of particular importance are material transfer agreements and business method patents.

The relevance of patents and other IP outcomes for monitoring the performance and impact of projects implies a strong plea for reporting procedures resulting in a comprehensive and verifiable database. For this purpose, the European Commission currently relies on the information from project reporting in the SESAM database. This study however reveals that the information on patents available within SESAM yields an incomplete and inaccurate picture. Additional time-

consuming processing of the available patent information in SESAM is required in order to arrive at encompassing and reliable figures. This is not an option for regular and large scale patent analyses which are also required to be comparable with other parts of the programme or for dynamic analyses. Moreover, the patent data in SESAM represent a considerable underestimation of the actual patent output of the FP7 NMP projects.

FP7 NMP projects reported 270 patent applications in SESAM, 62% of which were identified as registered patent documents after extensive querying in secondary source databases such as

PATSTAT and Espacenet. For these 163 matched patents, the study identified an additional 309 family members , as well as 818 patents with characteristics so similar to the SESAM patents that they are likely to be related to the project activities as well. These figures reveal a significant underestimation in the range of 56% (best case) and 15 % (worst case) if only those patents are considered which are currently registered in SESAM.

For the subset of SESAM NMP registered patents that were successfully identified in the PATSTAT

patent database, an assessment of the knowledge base (based on cited references), technological scope and (economic) value has been performed. Comparing FP7 NMP related patents with a control group of similar but non-project related patents, reveals that project-related patents appear to be narrower in scope - in terms of national jurisdictions, number of patent applicants, and

technological domains covered - and less ‘valuable’ – in terms of family size and triadic patents. These findings suggest that patents stemming from FP7 NMP projects concern ‘early stage’ rather than ‘ready to market’ developments.

The findings of this study highlight the need for a better specification of guidelines for adequate patent registration in SESAM, as well as recommendations about the type of indicators and the appropriate time horizon for monitoring FP7 NMP project outputs:

1. First, we recommend to expand the type of indicators to be mapped for monitoring innovative outputs of FP7 NMP projects. Whereas patents do account for the lion share, the picture would be enriched by adding information on trademarks, registered designs, scientific publications, open source agreements and standardisation activities. Besides mere

output volumes, indicators of output quality, value and impact can be envisaged. And, although questionable in terms of feasibility, it would be revealing to map and monitor characteristics of project participants - on an individual and/or organisational level.

2. Second, we developed specific guidelines for correct registration of patents in the SESAM database. It concerns especially the assurance of accurate coverage: by clearly delineating inclusion and exclusion criteria; by verifying the registrations through complementary use

of secondary source independent databases; and by incentivising correct registration of project outputs. Moreover, those who register outputs should provide their information in standardised formats that need to be clearly specified.

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3. Finally, there is an appropriate time window for monitoring and evaluating patents and other types of innovative outputs, relevant to the NMP domain. Sufficiently long time windows of at least three years after the end of a project are required for capturing and

including all outputs, taking into account follow-up developments and mapping indicators of impact (e.g. based on the number of times the patent gets cited in subsequent patents). For mapping and monitoring the innovative output of FP7 NMP projects, of which the first

have started in 2008 and some are still running until 2017, the appropriate time window would be 2010 to 2020.

Adherence to these guidelines will greatly enhance the ease and the reliability of processing and analysing SESAM registered data on patents (as well as other relevant project outputs); and hence also the rigor with which innovative output of FP7 NMP projects can be monitored.

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CHAPTER 1 – INTRODUCTION

This study is geared towards supporting performance assessment within the “Nanosciences,

Nanotechnologies, Materials and New Production Technologies” (NMP) Theme in the Seventh Framework Programme for Research (FP7), by generating knowledge about patent activities resulting from FP7 NMP projects. It considers how the monitoring of innovative outputs should be tailored to the specificities of the NMP domain, which is characterised by a strong industry-orientation and heterogeneity of outputs, leading to an outspoken relevance of debates on subject matter and the position of patents within the range of possible Intellectual Property mechanisms.

Policy context

Innovation - as a major driver behind economic development - is a primary concern for practitioners, policy makers and researchers. As policies for stimulating innovation, collaborative R&D programmes encourage interaction between different R&D-oriented stakeholders and create opportunities for exploration of – possibly high risk – new ideas. In line with this, the EU science policy aims to foster the ‘overall advancement of knowledge’ and to create a unified European

Research Area (ERA).

The Framework Programmes of the European Commission specifically call for an interdisciplinary approach, encouraging collaboration and networking, for directing research into selected areas with the goals of increasing industrial competitiveness and ultimately improving the quality of life for European citizens. Through FP7, Europe is investing in the knowledge-based society and innovation, aiming to enhance and maintain employment, competitiveness and quality of life. More specifically, the programme adopts a multiple actor perspective, as the objective is to gain

leadership in key scientific and technology areas, exactly by supporting cooperation between universities, industry, research centres and public authorities across the European Union as well as with the rest of the world.

The stimulation of innovation in key areas is also a central theme in the new Framework Programme for Research and Innovation, “Horizon 2020”, where “Key Enabling Technologies” (KETs) are an important constituent for the “Leadership in Emerging and Industrial Technologies”

(LEIT) initiative. The goal, more specifically, is to drive competitiveness and growth opportunities in

European industry, by strengthening industrial engagement in KETs and bring them to the market. “Nanosciences, Nanotechnologies, Materials and New Production Technologies” (NMP) are part of the KETs, besides other strategic technologies like micro- and nanoelectronics, photonics and biotechnology.

The ambitious objectives and the wide scale and scope of these Framework Programmes imply the investment of substantial amounts of public funding. Justifying such investments require that

proper account is taken of outcomes, hence the high relevance of output and impact assessment of such Framework Programmes. At the same time, as the literature shows, such assessment is fraught with several methodological concerns. It is difficult to separate the particular effects of EU programmes from the effects of the R&D spending of the participating firms and other organisations or from the effects of other (often national-level) development programmes (Luukkonen, 1998). Outputs can be hard to attribute to a specific project, especially if the R&D project is not the only source of a specific output, but if the latter is rather the results of a project

portfolio. This attribution problem is especially relevant for projects carried out in Framework Programmes, as they are often part of R&D project portfolios, rather than stand-alone activities (Polt & Streicher, 2005). Therefore, it is difficult to relate participation in Framework Programmes to economic performance and success on the level of participating firms or institutes.

Existing evidence about the impact of EU Framework Programmes

In spite of the abovementioned concerns, cumulative evidence has become available throughout

the literature about the importance of EU Framework Programmes (FPs). It focuses mainly on three aspects: networking effects, collective learning processes, and characteristics of collaborative R&D projects.

Networking

Intangible, infrastructural effects, such as learning new skills and catalysing new network

relations, are the impacts most often mentioned by all partners concerned (Luukkonen, 1998). A survey of Polt and Streicher (2005) confirmed the positive effect of the

Framework Programmes on networking and partnering. They stimulate networks among universities, research institutions and companies across national boundaries. A study on the variety of partners that were engaged in collaborative research projects in Nanotechnology within FP6 suggests that Nanotechnology research networks are predominantly populated by academic institutions and research institutes. Their central role

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in coordinating networks emphasises the emergent nature of Nanotechnology (Pandza, Wilkins & Alfoldi, 2011). An important achievement of the FPs seems to be the reduction of institutional barriers, as captured by country border effects, for research collaboration

between European organisations, both in the industry and public research sector (Scherngell & Barber, 2011).

Collective learning process

A main finding from studies of the EU research programmes is that intangible learning effects are the most often mentioned benefit for all parties involved (Georghiou et al., 1993; Reger & Kuhlmann, 1995; Moller & Kjeldsen, 1995). Furthermore, enhanced skills in international collaboration could further facilitate future collaboration efforts (Luukkonen, 1998). Marín and Siotis (2008) find that past experience in the Framework Programmes is an important antecedent of future participation.

Characteristics of R&D projects

Collaborative projects undertaken in the context of the EU Framework Programmes tend to involve higher scientific and technical risks, they are scientifically and technically more complex, involve longer time horizons and are further from market introduction compared to other R&D projects (Polt & Streicher, 2005). A common criticism is that government subsidies ‘crowd out’ private R&D investments (e.g. Wallsten, 2000). In the survey study of Guy, Amanatidou and Psarra (2005) a considerable share of participants reported that they

would have not undertaken their R&D projects in the absence of FP5 funding, i.e. these FP projects constituted pure additionalities. There was also a considerable degree of behavioural additionality for participants. Projects would have been smaller, with fewer (international) partners and shorter time-scales, if they would have pursued the projects on their own (Polt & Streicher, 2005). The fact that EU collaborative projects usually involve a larger number of partners and more complicated constellations, causes specific challenges in terms of intellectual property rights (Luukkonen, 2000), on which will be elaborated in

the subsequent parts of this study.

At the same time, the empirical literature with regard to performance effects of collaboration taking place in the Framework Programmes (e.g. effects on innovation, economic and technological outputs) is not conclusive. An exception is the study by Dekker & Kleinknecht (2008), who find that FP participants are more likely to hold patents. This is consistent with earlier findings that firms collaborating on R&D have higher propensities of applying for patent protection (Brouwer &

Kleinknecht, 1999). The lack of empirical evidence on Framework Programme effects on innovation and economic output is mainly explained by the pre-competitive nature of the projects (Aguiar & Gagnepain, 2013) and a scarcity of empirical data innovation outcomes and impact (rarely collected by the Commission).

Study objectives

The current study was set up to generate knowledge about patent activities resulting from FP7

projects within the field of “Nanosciences, Nanotechnologies, Materials and New Production Technologies” (NMP), as Key Enabling Technologies. The acquired knowledge about the dynamics

within this field is seen as instrumental for overcoming issues with performance assessment and should help to set up a monitoring system, tailored to the NMP domain, and instrumental for guiding policy making within that field. Several objectives were specified in this respect:

A first project objective was to contribute to the evaluation of NMP activities on innovation in Europe, by relating FP7 NMP project information to patent activity.

A second objective implies the identification of potential and real constraints of using patents as an indicator for innovative activity, specifically in the NMP field. NMP specificities in patenting were taken into account for arriving at sufficiently nuanced conclusions and interpretations, directly valid for the NMP field. As the NMP thematic area is quite heterogeneous and broad (including Nanotechnologies, Materials, and Production/manufacturing technologies), different IP strategies may be implied, posing

challenges in identifying relevant output and in selecting and interpreting appropriate indicators.

A third objective entails explicit recommendations towards EC data collection, project reporting and data use for better measuring and monitoring results, outputs and impacts of research, development, and innovation activities in the NMP area.

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Guide to the reader

This final report covers the different steps undertaken in the study and focuses on the findings and

conclusions that, with further critical reflection, have led to the formulation of recommendations for future mapping and monitoring of innovative output from FP7 NMP projects. Chapter 2 is dedicated to a review of the literature on IP practices, applied to the NMP context. In chapter 3, we sketch

the methodological foundations of the study, with a focus on the combination of quantitative and qualitative data sources and data collection. Chapter 4 maps patenting activities from FP7 NMP project activities, whereas chapter 5 considers potentially relevant project characteristics and analyses whether they affect patent project-related output; with a separate section dedicated to IP allocation agreements. The final chapter 6 presents a synthesis of the main findings, in relation to the core questions raised. Based on these findings, the report concludes with a set of

recommendations that should guide future evaluation of IP outputs from FP7 NMP projects, some of which may be relevant within the context of other programmes as well.

CHAPTER 2 – IP PRACTICES IN THE NMP CONTEXT

This chapter is dedicated to a review of the literature on IP practices, applied to the NMP context. It starts with an outline of the constituents of IP practices that can be enacted by entities engaging in R&D, with a specific focus on the role of patents alongside other IP mechanisms. Next, the implications of the NMP field specificities for (the relative importance of certain) IP practices are

summarised.

IP strategies in general

Protecting intellectual property (IP) is essential on a societal level as it incentivises R&D activities, leading to R&D outputs of which the returns can be safeguarded. A variety of mechanisms can be deployed to protect intellectual property. Formal types of IP protection include design rights,

copyrights, trademarks and patents. Whereas all of the previous mechanisms imply disclosure of the content of the intellectual property for which protection is being sought, organisations can also

decide to protect their inventions under the form of trade secrets. Another IP strategy is defensive publishing, which denotes the publication of a description of the invention. By making the information publicly available, prior art is created, which prevents patents from being granted for the published invention. Prior research reveals that, in most industries, firms rely predominantly on mechanisms other than patents to protect their innovations, including (besides secrecy), first

mover advantages and the exploitation of complementary capabilities (see Cohen et al., 2002). Hence, a variety of IP strategies and mechanisms exists to protect innovations and the use thereof. In what follows, strategies related to patenting, trade secrets and IP governance are summarised.

Patenting Obstacles: The presence of a patent system does not imply that all (novel) inventions will result in patent filings. A meritorious study in this context is from Cohen, Nelson & Walsh (2000), who conducted a survey for examining the reasons behind firms’ decisions on whether or not to patent.

The ease of inventing around was the most cited reason for not patenting, along with the unwillingness to disclose critical information and the difficulty of demonstrating the novelty of an

invention. Moreover, application and defense cost were frequently mentioned as reasons not to patent. Furthermore, as contended by Kash and Kingston (2001), complexity of inventions may also impede patenting and motivate other IP strategies, as complexity also acts as a barrier towards imitation.

Motives: Many scholars have investigated firms’ reasons to file for patents. Blind et al. (2006) conducted an encompassing survey covering firms’ motives for patenting. Their findings firstly indicate that the traditionally known protection motives remain most important, i.e. the protection of investments in innovation/R&D by obtaining exclusive exploitation rights. Secondly, the authors emphasise the growing importance of several strategic reasons to patent, distinguishing between exchange (e.g. to generate licensing revenues), reputation (e.g. to improve the firm’s technological image) and blocking motives (e.g. offensive blocking to hinder competitors in pursuing certain

technological developments).

Patenting versus secrecy

Whereas patents provide exclusive rights, this is not the case for trade secrets. On the other hand, while patents offer better protection, their drawback is that potentially valuable information has to be disclosed in the patent document, which may give away relevant information to competitors. This is avoided when using trade secrecy. Previous empirical findings show that trade secrets are considered more important than patents as a mechanism to protect inventions (Cohen, Nelson &

Walsh, 2000). Context factors that influence the choice between patenting and secrecy include the country or industry environment, as well as the nature of the invention and the IP experience of

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the organisation itself. For instance, relating to the nature of the invention, not all innovations (subject matter) are patentable. However, patent law continues to evolve, of which the enhanced ability to patent business methods, e.g. pertaining to e-commerce, is an example. As a second

example, certain innovations belong to technology fields where it is easy to develop and to patent related or overlapping technologies, enabling the creation of a ‘patent fence’ by competitors. When facing the risk of patent inference, a firm may be inclined to rely on trade secrets rather than on

patents.

IP governance: ownership options The Open Innovation paradigm conceives R&D as an open system where firms can benefit from collaborations with external knowledge partners (Chesbrough, 2003). However, the more collaborative the R&D, the more difficult it becomes to appropriate the resulting outcomes and to decide who owns which R&D outputs. Ownership cannot be fully pre-specified in agreements, since

outcomes of R&D activities are to some extent unpredictable in nature and might lead to unexpected IP results. Issues relating to IP governance and ownership are especially relevant in the context of European FP projects, as consortium members are confronted with the question on allocation of innovative results and outputs. There are four possible ways for allocating innovative

outputs: full, public, third-party or joint ownership. Full ownership refers to the case where the partners divide the obtained IP or one partner ends up with all IP resulting from the collaborative R&D. Public ownership refers to the case of defensive publishing, where the innovation is published

in order to make it public knowledge. Another option is third-party ownership, which means that the innovation is sold to another party that did not contribute to the invention process. With joint ownership, the partners share the ownership of their R&D outputs. Previous research on joint patenting emphasises potential disadvantages. For instance, Hagedoorn (2003) labels co-patenting as a second-best strategy, compared to full ownership. Interview findings of Belderbos et al. (2014) suggest that ex-ante agreements on co-patenting may have a beneficial impact on the value-creation dynamics in the R&D collaboration.

NMP field specificities and potential implications for IP strategies within NMP

Nanosciences and Nanotechnologies, Materials and New Production Technologies overarch three research fields, each of which is quite heterogeneous1. The specific nature of these knowledge domains has a number of implications in terms of IP strategies. Some are especially relevant for

Nanotechnology. Three big differences between the emerging science of Nanotechnology and other

sciences are relevant with respect to the IP strategies adopted in the domain (Lemley, 2005). First, as opposed to other enabling technologies of the 20th century – the computer, software, the Internet, and biotechnology – Nanotechnology is the only field in which initial inventions were patented at the outset. Some worry that this large early stage role for patents interferes with innovation in Nanotechnology, as broad patents granted to initial inventors can lock up or retard necessary improvements needed to take a new field from interesting lab results to commercial viability. Moreover, a potential lack of focused expertise in patent offices (due to the recent nature

of the field) is likely to result in (1) the improper rejection of patents due to a mistaken conclusion that the taught matter is not new, as well as (2) overly broad patents giving the owner excessive control over a particular area (Bastani & Fernandez, 2002). Second, the field of Nanotechnology (and to some extent also Materials and New Production technologies) finds applications in a wide set of industries. Nanotechnology hence has the potential to impact a large variety of technological fields, which might result in highly valuable patents and which may significantly affect incentives to license Nanotechnology patents. Finally, a comparatively large number of Nanotechnology patents

have been issued to universities, as many of the patents issued so far belong to research labs doing fundamental scientific research. According to Lemley et al. (2005), universities have generally found that they could maximise their licensing revenue by granting exclusive rather than nonexclusive licenses. But for certain basic inventions – specifically, those that enable broad or unpredictable new directions in research, like in Nanotechnology – exclusive licensing can have significant social and perhaps even private costs, because it limits competition in the exploitation of

building blocks and therefore limits the follow-on innovation that can occur.

Broadening the discussion from Nanotechnology to the whole NMP domain, much of the IP related issues in this domain seem to focus mainly on ‘subject matter’ debates. In Nanotechnology, a difficult question relates to the separation between inventions and discoveries or even sometimes scientific theories (and their mathematical translation/deductions towards observable matter). Similar subject matter issues might be relevant for the Materials field as well (invention versus discovery) and for New Production technologies (technicality of the inventive step). Considering the

specific content of the subject for which IP is sought, two specific types of IP arrangements are directly relevant in the NMP field. For the Materials field, IP practices might include Material

1http://cordis.europa.eu/programme/rcn/854_en.html; http://ec.europa.eu/research/participants/data/ref/fp7/132117/d-wp-201301_en.pdf

http://cordis.europa.eu/programme/rcn/854_en.htmlhttp://ec.europa.eu/research/participants/data/ref/fp7/132117/d-wp-201301_en.pdf

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Transfer Agreements. To some extent, these MTA’s may be relevant in the Nanotechnology field as well, notably for nanoparticles and -materials, e.g. nanotubes. For New Production technologies, business method patents enter the stage.

Material Transfer Agreements Material Transfer Agreements (MTA) are increasingly used for transferring materials among researchers. They are legal agreements governing the transfer and exchange of (biological)

materials between parties. Such transfers can lead to valuable inventions, which will then inevitably lead to the question of who will own or control (parts of) the discoveries. In a survey with 414 biomedical researchers, Walsh, Cho and Cohen (2005) find that MTAs often come with conditions. Especially when industry suppliers are involved, MTAs might include demands for reach-through rights, requiring that the recipient of the materials surrender all claims to IP based on inventions using the materials. In other cases, the MTAs contain clauses that require royalties for

the provider, on any product resulting from research employing the material, the so-called reach-through licensing agreements (RTLAs). Moreover, to the extent that MTAs delay researchers’ access to materials due to lengthy and difficult negotiations, they are sometimes thought to impede the progress of science and technology (Mowery & Ziedonis, 2007).

Business Method Patents Business method and software patents2 are especially relevant for New Production Technologies. Traditionally, patents on business methods were considered to be outside the scope of the US

Patent Act, which excludes laws of nature, natural phenomena and abstract ideas as patentable subject matter. The patent system was meant to protect technology, e.g. machines, devices and new chemical compositions, rather than pure concepts. Because business methods are not tied to machines or devices, they were considered as not patentable subject matter. Over time, they came to be understood as also implying physical transformations, rather than mere abstractions. After the US Supreme Court decision in Diamond vs. Diehr in 1981, the subject matter exception that restricted the patenting of software-related inventions was gradually relaxed. With the acceptance

of patents for software, courts could no longer rely on the distinction between concepts and machines. Once this occurred, the way was open for computer-related business concepts to be patented. The acceptance of business method patents, together with the rise of the Internet, prompted a surge in business method patent applications. A diverse number of business methods

are now protected, e.g. ranging from e-commerce to online gambling. In recent years, however, the USPTO and US courts have adopted a more restrictive approach to what can be patented in the

field of business methods and software.

While it is widely acknowledged that business methods are patentable subject matter in the US, there has been some confusion as to whether business methods can be patented under the European Patent Convention (EPC). It will only be possible at the European Patent Office (EPO) to obtain a business method patent for inventions with technological features that solve a technical problem in a non-obvious manner and independently from the business or software context in which they are claimed. Critics have argued that the granting of business method patents may

hamper innovation, making it more difficult to engage in entrepreneurial activities that are computer-related. Moreover, they contend that business method patents are too easily granted. It is claimed that they suffer from a lack of novelty and non-obviousness and that they are “weaker” than other patents because of inadequate reference to prior art in the patent applications. Because knowledge about business methods resides mainly in the practices and policies of the firms that

use them, even common methods may not be documented as prior art (Dreyfuss, 2000; Allison & Tiller, 2003; Hall, 2003; Wagner, 2008). Bessen and Meurer (2008) argue that vague claims for

abstract inventions such as software and business methods make patents too expensive for society.

Finally, and on a more general level, the debate and the controversies related to specific subject matter issues undermine the faith and confidence that some practitioners have in the patent system and the enforceability of IP rights. Critics argue that the patent system is broken and that it causes researchers to divert from doing research.

Conclusion

A variety of IP strategies and mechanisms exist to protect innovations and the use thereof, most of which are relevant within the NMP domain as well (formal mechanisms like patents, trademarks, design rights, copyrights, but also defensive publishing, trade secrecy). Specific to the NMP domain

is the confrontation with ‘subject matter’ debates and controversies. Paying specific attention to

2 The distinction between business method patents and software patents is not at all sharply drawn in the current literature. Whereas software patents relate to patents that cover computer implemented process, business method patents tend to combine software (algorithms) with more tangible, technical, components.

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Material Transfer Agreements and Business Method Patents seems relevant. The insights gained have co-directed the subsequent steps in the study, where specific attention is devoted to the role of patents among other IP strategies within FP7 NMP projects.

CHAPTER 3 – DATA & METHODOLOGICAL APPROACH

The study objectives presented in chapter 1 are best served by a combined approach of

quantitative and qualitative analyses. Patent analyses and in-depth insights - gained through surveys and interviews – have been complemented throughout the study. A synthetic reflection on the findings from both approaches allows arriving at well-founded recommendations. In this section, we sketch the quantitative and the qualitative approaches, with a focus on the data sources used and the main data collection steps3. The first section covers the quantitative approach, describing the collection of project-related patent data, the extraction of a control group of benchmark patents and the identification of scientific research sources cited in project-related

patents. The second section outlines the approach for the qualitative data gathering, describing the survey and interview.

Quantitative approach: bridging FP7 NMP project data and patent data

Data sources For the purpose of this study, the team was given access to the part of the project reporting database SESAM that contains information on FP7 projects in the NMP field. For these projects,

the following information was made available:

Project identification: Project id, acronym and reference; project title and abstract.

Proposal: Research theme; Description (levels 5, 6, 7 and 8).

Funding: Directorate and Directorate General; Research programme (all NMP) and Research sub-programme (4 subdivisions); Funding scheme, Sub funding scheme and Sub

funding description; EU financial contribution to the project, the total cost of the project

(i.e. project budget).

Timing: Contract signature date; Project start date; Project end date; Project Duration; Submission date of final report.

Consortium: Number of participants; Country of the organisation filing the final report; Project officer last name; Participant id; Participant short name; Participant legal name; Participant order number; Participant role; Participant total cost; Participant EC contribution; Participant funding percentage; Participant PIC; Participant Lump Sum Used

Y/N; Participant address; Organisation NUTS3 region; Organisation Nace Code;Organisation Email; Organisation Status; Organisation Web Page; Contact Function; Registration ID; Registration VAT Number; Organisation Type; Participant ENTERPRISE (Y/N); Participant INO (Y/N); Participant INOEU (Y/N); Participant NON PROFIT (Y/N); Participant NON PROFIT RES (Y/N); Participant PUBLIC BODY (Y/N); SME Validated Flag (Y/N); Person Role; Person Function; Person name and title; Person Sex; Person email and phone.

Intellectual Property Rights (IPR): Type; Description (subject and title); Country or system

of the patent application; Patent application reference.

The core topic of this study relates to IP coming from the projects, so all information on IP is of special interest. First, we used the patent identification information that is available in SESAM for matching patents to PATSTAT (cf. infra). In addition, a number of other project characteristics were extracted for being able to analyse relations between characteristics of projects and the patents stemming from them. The following project characteristics are considered: Project duration;

Amount of EU financing; Number of participants in the consortium; Number of different nationalities among consortium partners (international scope of the consortium); Combination of institutional types present within the consortium.

The source for patent data that was used for this study is PATSTAT4 (i.e. EPO Worldwide PATent STATistical Database). It is published by the European Patent Office (EPO) and developed in co-op-

3 For a more detailed description of the data collection and analytical approach, we refer to Deliverable 2 of the study (submitted to EC in October 2014).

4 In-house version, KUL – ECOOM license.

15

eration with the World Intellectual Property Organisation (WIPO), the OECD, the United States Patent and Trademark Office (USPTO), the Japanese Patent Office (JPO) and other national patent offices. The database covers around 100 national patent offices worldwide, including of course the

most important and largest ones such as the EPO, the USPTO and the WIPO. Designed in a relational structure, PATSTAT provides a wide and well-structured availability of raw data: relevant dates (of priority filing, application, publication, grant), applicants, technology classifications, etc.

As such, it has been designed especially for large scale statistical patent analyses. Updates of PATSTAT are produced every six months, around April and October. For this project, data will be extracted from the PATSTAT October 2013 version, which was the most recent version available at the starting time of the study.

For the extraction of scientific publications, linked to the FP7 NMP project-related patents, Thomson Reuters’ Web of Science (WoS) database5 was used. The WoS is an international

bibliographic database consisting of millions of research publications in some 14,000 science journals and conference proceedings. Most of these sources are English-language publication outlets. Although the WoS covers all fields of science, its focus is largely on the natural sciences, medical and health sciences, life sciences, computer sciences, mathematics, and engineering

sciences. More than one million publications are added to this database each year. For the purpose of these analyses, an upgraded database of the WoS was used (developed at CWTS, Leiden) which contains bibliographic information from 1980 onwards for a major part of the international scholarly

literature published in peer-reviewed scientific journals. It is specifically tailored for sophisticated and comprehensive large-scale bibliometric usage.

Identification and matching of patents in SESAM An essential task in the study consisted of the identification of FP7 NMP project-related patents registered in SESAM and their matching to a secondary source patent database (i.c. PATSTAT). The matching to PATSTAT allows for the extraction of complementary information to map and analyse patent output in terms of technology domains, family membership, applicants (including their

addresses and their sector of activity), and references to prior art.

The identification of the registered patents was based on three fields of potentially relevant information, available in SESAM:

Patent number (SESAM field ‘Patent Application Reference’)

Title (SESAM field ‘Description of the IPR (Subject and Title of the IPR)’)

Applicant (SESAM field ‘Organisation Filing the IPR in the Final Report’)

However, several problems became apparent for each of these information fields. Two main issues impeded the possibility of automated matching between SESAM and PATSTAT (or any other secondary source patent database). First, there is a lack of standardisation of the input fields in SESAM. This is especially problematic for the patent numbers: the format and the notation of the numbers are not standardised and the nature of the registered number differs case-by-case (patent publication versus patent application number). In addition, the lack of standardisation of organisation names (provided names may differ across databases) seriously complicates querying

and matching on the level of organisations. A second issue relates to discrepancies between the information inputted in SESAM and the information in the official patent filing. The applicant in the

retrieved patents (as registered in the patent database) is often different from the filing organisation that is mentioned in SESAM. Of all the patents that were retrieved in secondary source databases, only 30% have an applicant that was also registered as ‘Organisation Filing the IPR in the Final Report’ in SESAM. Also, the ‘Description of the IPR (Subject and Title)’ in SESAM is often not the official title as registered on the patent application. This complicates title-based

queries, requiring broader sets of key terms (defined on a case-by-case basis) or text mining techniques that involve approximate string searching. Due to these issues, the identification and matching of patents in the current version of SESAM is seriously hampered, requiring case-by-case queries, based on different combinations of the available information to decrease the risk of false hits. At the same time, the encountered issues serve to shed light on the usefulness of the patent information as currently registered in SESAM (cf. infra).

Three datasources were used for the identification and the matching of patents registered in SESAM. Starting point for the case-by-case queries were the Micropatent and Espacenet online patent repositories. They are easily searchable online and updated on a weekly basis, providing

information on the most more recent patents. Micropatent is a Thomson Reuters licensed online patent database (KU Leuven license), covering the largest patent offices worldwide: USPTO, EPO,

5 In-house version, CWTS license.

16

WIPO, JPO, DPMA (Germany), IPO (UK) and INPI (France). Espacenet is a publicly available online patent search platform, administered by EPO, and with coverage of all patent offices worldwide. These online repositories include the opportunity for downloading original patent documents and

information on patent family structures for each document separately. They are hence useful for case-by-case searches and for validation of correct versus false hits when searching on key terms or numbers. However, these online search repositories do not lend themselves for statistical

analyses and indicator development on large datasets, as they do not provide the possibility of downloading data on lists of patent documents. For statistical analysis and indicator development, hence, the PATSTAT database was used (cf. supra).

The search strategy primarily involved case-by-case queries in Micropatent and Espacenet. For the patents that were retrieved in these online repositories, official publication and/or application numbers were logged, which were then used for matching to PATSTAT and extracting all relevant

information from PATSTAT that is needed for the analyses in this study.

This strategy resulted in a PATSTAT match for 168 of the 270 SESAM-registered patents (i.e. 62%). When considering the separate sub-programmes, the matching success ratio is similar for

each of them (see Annex 3 for breakdown tables): 61% for NMP-1 (Nanosciences & Nanotechnologies); 62% for NMP-2 (Materials); 60% for NMP-3 (New Production) and 57% for NMP-4 (Integration). Reasons for matching failure include: registration of insufficient or inaccurate information fields in SESAM (obstructing retrieval in online repositories); wrongful registration as

‘patents’ of intentions to file a patent or invention disclosures (obstructing retrieval in online repositories); recentness of patent applications (allowing retrieval in weekly updated online repositories, but obstructing matching to PATSTAT). More specifically, a total of 34 patents were retrieved in the online repositories, but with application dates later than April 2012. Due to the (minimum) 18 month time lag between filing and publishing of patent, these patents are not yet covered in the PATSTAT October 2013 version that was used. After elimination of five duplicates, 163 of the 168 matched patents remained. This group of SESAM-registered patents that were

successfully matched to PATSTAT (further referred to as ‘core’ patents) will serve as the basis for all further patent analysis within this study.

Identification of scientific prior art in project-related patents

The composition of the science base of FP7 NMP project-related patents reveals a picture of scientific activities that are related to the technological developments made within the projects. This mapping was based on the presence of non-patent literature references (NPLRs) - contained in

the identified set of project-related patents – that were matched with research publications in the Web of Science bibliographic database, based on matching algorithms that were developed at CWTS Leiden.

The input dataset of 163 patent documents contained 935 NPLRs in total. For 728 of those (78%), a corresponding record was found in the Web of Science. These are denoted as ‘WoS-NPLRs’. The remaining 207 NPLRs were not covered. After deduplication, 678 unique scholarly publications remained, 656 of which were published after 1980 (hence covered in the CWTS licensed version of

the Web of Science). Affiliation address information from the authors in the matched research publications, as well as information on the research fields, was then used to map the science base of NMP project-related patents in terms of:

Countries where the cited research was done;

Cited research fields;

Scholarly publications categorised in three ‘research application domains’ ranging from ‘basic science’ to ‘applied science’.

Identification of control group of non-project related patents A comparative analysis between these project-related patents (referred to as ‘core’ patents) and similar but non-project related patents (referred to as ‘control’ patents) allows for assessing the distinctiveness of patents related to EC funded projects. For each project-related patent, the aim was to identify ten control patents. Representativeness of the group of control patents per core

patent was warranted by assuring similarity in terms of: applicant (institutional type and country), patent system, application period and technology domain. At the same time, to ensure a sufficient

degree of distinction between project and non-project related patents, we made sure that the control patents were no members of the project patent’s family and that they did not share any applicant. Several criteria sets (different combinations or relaxations of the above specified criteria)

17

were defined and applied stepwise in decreasing order of restrictiveness for being able to obtain ten control patents per project-related patent6.

This selection procedure allowed for the extraction of a representative set of control patents for 149 (91%) of the 163 project-related patents. For 14 project-related patents (9%), no control patents were found, due to missing information on technology domains (IPC codes) and/or applicants. For four core patents, less than ten control patents were retrieved that meet even the

least restrictive set of selection criteria. The total set of control patents contains 1475 patents (1493 after deduplication).

Qualitative approach: Survey and interview methodology

As stated earlier, the study objectives are served by combining quantitative analyses with more in-depth insights, gained through a qualitative approach with surveys and interviews. Two online

surveys were implemented to obtain information on IP strategies and more specifically on patenting activities among NMP project participants. The first survey concerns a survey for NMP projects where patenting activities are reported. The second survey concerns a survey for NMP projects where no patenting activities are reported. In addition, ten in-depth interviews were

conducted. The information obtained in the interviews provides more details on the IP strategies applied in the consortia and on the reporting activities of the scientific coordinator.

Survey among patenting NMP project members

The main aim of the survey among NMP project participants for which patenting activities have been identified in SESAM is to collect information on patenting activities (motives for patenting and maturity of technology) and strategies (IP allocation agreements and IP strategies) within NMP projects7. In addition, the survey intended to obtain additional information on patent applications (application title, number and applicant) for the patents where no correct patent application information was reported in SESAM.

SESAM contains 270 registrations of patent activity (actual patent applications or intentions to

patent). The number of patents in one project varies between one and twelve. 64% of the NMP projects have two or more patent records in SESAM. In order to achieve a balance between the amount of information that needed to be collected and what was reasonable to ask from

respondents, it was decided to put in place a “cut-off” point of surveying three patents. In total, 105 project coordinators were addressed and 210 patent records, identified in SESAM, were surveyed. 29 responses out of a panel of 105 contacts were obtained (response rate of 28%). We

would like to indicate that the response obtained via the surveys is limited and that the results have to be interpreted with care.

Survey among non-patenting NMP project members This survey among NMP project participants for which no patenting activities were identified in SESAM had the purpose to check the IP allocation agreements and IP strategies within non-patenting consortia and to see whether they prefer to use IP protection options other than patents8. 184 non-patenting NMP projects were identified in SESAM. 29 responses out of a panel of

184 contacts (project coordinators) were obtained (response rate of 16%). We would like to indicate that the response obtained via the surveys is limited and that the results have to be interpreted with care.

Interviews among patenting NMP project members To verify the outcomes and conclusions of the patent research and the web-based survey and to obtain more qualitative insights, in-depth interviews were carried out. The interviews addressed project level information (IP allocation agreements and IP strategies), patent level (validation and

correction of patent information, motives and barriers for patent application) and the experience of the interviewee with FP7 NMP projects9. In total, 10 in-depth interviews were conducted with 8 project coordinators and 2 project participants.

6 A more detailed description of the criteria and the selection procedure is available in deliverable 2 of the study (submitted to EC in October 2014)

7 An overview of the full questionnaire is added in Annex 1a.

8 An overview of the full questionnaire is added in Annex 1b.

9 An overview of the interview questionnaire is added in Annex 1c.

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CHAPTER 4 – MAPPING OF PATENTS WITHIN FP7 NMP PROJECTS

This chapter is devoted to the mapping of patenting activities from FP7 NMP project activities. In a

first section, we consider the role of patents within the range of available IP activities, based on the survey and interviews with project (scientific) coordinators. Having established the importance of patents as innovative output in FP7 NMP projects, and after an evaluation of the coverage of SESAM in terms of project-related patent activities, we continue with a descriptive mapping of the main characteristics of FP7 NMP related and benchmark patents. A final analytical section investigates differences between project-related patents and similar but non-project-related patents (control patents) in terms of patent value, as measured by several indicators.

The role of patents as IP protection mechanism within FP7 NMP projects

IP protection oriented strategies As outlined in section 2.1. (cf. supra), organisations can pursue different IP strategies in order to protect the intellectual property generated within one project: patenting, trademarks, registration of designs, secrecy, defensive publishing, open sourcing. In this section, the survey and interview

results are presented that shed light on the role of patents within the range of IP mechanisms deployed within FP7 NMP projects.

A total of 290 NMP projects were identified in the SESAM database10. Of these 290 NMP projects, 36% (105) have some record on patent activities, with a total amount of 270 patents registered in SESAM. Hence, for 185 projects, no information on patenting activities has been reported by the scientific coordinator (in SESAM). If the project is recent (finished recently or not finished yet), it is plausible that so far there are no patent applications as there is no patentable outcome (yet). It is

possible that later on, patent applications will be filed. This specific issue was questioned in the survey addressing the non-patenting consortia. 3 of the 29 respondents indicated that in the meantime they have patent application(s) pending of which the claims stem (at least partially) on the project activities11.

Organisations can have a diversified portfolio of IP strategies. Survey results indicate that the

share of consortia that used other IP oriented strategies (besides patenting) is similar between the patenting consortia and the non-patenting consortia (35%).

At the same time, organisations can decide to not pursue any IP oriented strategies. Results show that 65% of scientific coordinators of non-patenting consortia have not applied IP oriented strategies. However, when further analysing the motives why these consortia did not file for patents, six respondents (out of 17) indicated that it was a deliberate choice for open access/source, secrecy and/or defensive publishing. This means that although these coordinators answered that they “did not engage in IP oriented strategies”, they did actually engage in IP

oriented strategies, but they were not aware of what is exactly captured under “IP oriented strategies”. This lack of understanding of what exactly is covered by ‘IP protection mechanisms’ implies a risk of inaccurate registration and categorisation of IP forms in SESAM, as inputted by the project coordinators. Indeed, in the in-depth interviews, scientific coordinators indicated the importance of better IP knowledge in their role as coordinator. A shared understanding of IP mechanisms among consortium partners was also indicated as important, and anecdotic examples

were provided where difficulties occurred when partners do not possess sufficient IP knowledge. It

was suggested that IP training courses for both the coordinators and the partners could be useful in this respect. Some interviewees stated that they would welcome more support from the European Commission in this area.

Table 1 gives an overview of the types of IP oriented strategies for patenting and non-patenting consortia, as indicated in the survey.

10 Corresponding to the number of projects that were finalised at the time when this study was carried out (2014).

11 The end dates of these projects were in 2012 and 2013.

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Table 1 - Type of IP oriented strategies, besides patenting (*)

Type of IP oriented

strategies (excluding patenting)

Trademarks Registration

of design Secrecy

Defensive publishing

Open sourcing

Other (**)

Total

# % # % # % # % # % # % #

Patenting consortia

0 0% 1 11% 5 56% 4 44% 2 22% 0 0% 9

Non-Patenting consortia

2 22% 2 22% 9 60% 3 20% 4 27% 2 22% 15

Source: Surveys among patenting and non-patenting NMP projects (*) Respondents could select multiple IP oriented strategies (**) “Internet dominium” and “workshops to discuss privacy issues including how access to confidential data can be provided for

scientific assessments”

It can be seen that, overall, secrecy is the most common IP oriented strategy (besides patenting) both in patenting and non-patenting consortia. This confirms literature which indicates that for innovative firms, combining secrecy and patenting is the best strategy in case they do not benefit from a natural protection. Specifically for the patenting consortia we observe that the combination of secrecy and defensive publishing (and patenting) occurs in 33% of the cases. After a detailed

analysis, we conclude that non-patenting consortia more frequently apply a wider portfolio of IP oriented strategies than patenting consortia, which is also intuitive.

Motives and obstacles for patenting in FP7 NMP projects Besides addressing the broader range of IP mechanisms, the survey and interviews focused further on the deployment of patenting as an IP protection mechanism, inquiring further about motives

and obstacles that are driving decisions specifically relating to patenting activities.

Motives for patenting

The literature on motives for patenting (cf. supra, section 2.1.1.) indicates that protection of investments and strategic considerations (exchange, reputation, blocking) are important drivers of patenting behaviour. The results from the patenting survey among NMP project participants are partly in line with this. The most important motive to apply for a patent is enabling (future) commercial exploitation (83% of the respondents indicated that it is important or extremely important). This motive is followed by the creation of licensing and/or cross-licensing opportunities (72%).12 The importance of these motives was confirmed in the interviews. Other motives to

patent are: prevention of imitation (64%), reputation (64%), pure defense (31%) and the creation of opportunities to participate in defining Technical Standards (11%).

Obstacles to patenting

The presence of a patent system does not imply that all inventions will result in a patent application. Organisations can deliberately choose to apply other IP strategies besides patenting (e.g. secrecy, trademarks, publishing etc.). The presence of obstacles such as costs, inventing

around, time etc. can also hamper patenting (cf. supra, section 2.1.1.).

In the survey of non-patenting consortia, the question was raised what the reasons were for deciding not to file for a patent to protect the exploitable outcome resulting from the project. As can be seen in Table 2, the strategic choice to opt for secrecy (n=7), the lack of patentability in Europe of the subject matter from the generated knowledge (n=7) and the ease to (legally) invent around the claims once the patent publication would be published (n=5) were most frequently indicated as inhibiters of patent applications. In the interviews, the lack of available resources to

apply for a patent are also indicated as a reason to not apply for a patent. An interviewee confirmed that, especially for smaller research institutes and companies, the cost to apply for a

patent (both in terms of human resources and charges related to the application process) can be a

12 No relationship between the motives to apply for a patent and the approximate estimation of the (potential) economic value of the patent can be identified based on the survey results.

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real obstacle when no budget was reserved for this aspect in the proposal. It was therefore suggested to establish a flexible EU funding scheme for smaller organisations who want to protect results obtained in FP projects but have no financial means to do so. At the same time, these

mentioned cost-related obstacles appear to ignore the eligibility of patent costs within the FP7 context. To the extent that this stems from a lack of beneficiaries’ awareness of financial guidelines in FP7 actions, a clear communication of patent intentions and upfront negotiation about conditions

of reimbursement could improve the valorisation of research results.

Table 2 - Main reasons to not apply for a patent (n=24)*,**

Reasons Number

The strategic choice is to opt for secrecy instead of patenting 7

The generated knowledge is non patentable subject matter in Europe (e.g.

Databases Business Method Patents) 7

Once the patent application would be published, it would be easy to

(legally) invent around the claims 5

No resources available to apply for a patent 4

Deliberate choice for open access/source 4

The strategic choice is to opt for other forms of IP instead of patenting 4

The generated knowledge is not novel/original enough for a patent application

3

Value of patent would be lower than total cost of patenting 3

No confidence in the patent system and the enforceability of obtained IP

rights 2

The presence of other contractual agreements (e.g. Material Transfer Agreements) prevented us from doing so

2

Duration of the granting procedure (‘time to patent’) 2

Source: Survey among non-patenting NMP projects

* Respondents were asked to indicate up to three reasons why they did not apply for a patent within their consortium ** Eight non-patenting survey respondents indicated that “other reasons” were an important motive to not apply for a patent

The strategic choice to opt for secrecy is an important reason for not patenting. As was also put forward in the literature, organisations are faced with a trade-off between patenting and secrecy.

Patents provide exclusive rights but potentially valuable information has to be disclosed in the patent document. This issue can be avoided when applying trade secrets instead of patenting. Previous empirical findings show that trade secrets are considered more important than patents as a mechanism to protect inventions (Cohen, Nelson and Walsh, 2000). The survey results confirm

that secrecy is an important IP strategy considered within the FP7 NMP projects13. Another reason to not apply for a patent was a lack of resources. One record which indicated an intention to file for a patent for example concerned a possible patent application co-owned by a research organisation

and an SME. Due to financial problems of the SME, no patent application was filed.

The discussion in the section of ‘NMP field specificities and potential implications for IP strategies within NMP’ (cf. supra) revealed that the specific nature of the knowledge generated in the NMP domains has some implications in terms of IP strategies. In Nanosciences, Nanotechnologies and Materials Technology, Material Transfer Agreements are gaining in importance. Business Method patents are important in New Production Technologies. The patentability of Business Methods is acknowledged in the US. In Europe though, very specific technical features need to be fulfilled in

order to able to apply for a patent. It is thus very difficult to apply for a Business Method patent at the European Patent Office, since most of the generated knowledge is not acknowledged as patentable subject matter. The relevance of this issue within the context of FP7-NMP projects was confirmed in the survey results. As shown above in table 2, for seven projects (one Integration

13 We cannot compare the relative importance of secrecy versus patenting because the information about patenting was obtained from SESAM (full sample) while information about secrecy was obtained from the survey.

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project, three Nanosciences and Nanotechnologies projects and three New Production Technologies projects14) without patent applications, the reason to not file for one was the non-patentability of the subject matter in Europe. In order to obtain more information about this, one in-depth

interview was conducted with a survey participant who indicated this response. This participant confirmed that the concerned project was mainly about the development of methodologies and that hence, the reason to not apply for a patent was the non-patentability of the subject matter in

Europe. Survey results also indicated that in two projects (New Production Technologies projects), patenting was prevented by other contractual agreements (e.g. Material Transfer Agreements).

Conclusion Organisations can decide to apply a focused or a diversified IP oriented strategy. Secrecy and patents are commonly used IP strategies. 36% of the FP7 NMP projects decided to engage in patenting activities as an IP strategy. This means that, up to the time of this analysis, 64% of the

consortia had no intention to file a patent. Indeed, the presence of a patent system does not imply that all exploitable output will result in a patent application. The lack of available resources, the non-patentability in Europe of the subject matter from the generated knowledge, and the ease to (legally) invent around the claim once the patent publication would be published, are indicated as

obstacles to apply for patents. The main reason to not apply for a patent though is the strategic choice for secrecy. Consortia which do apply for a patent most of the time do this to enable commercial exploitation and to create licensing and/or cross-licensing opportunities.

In spite of obstacles to patenting and the presence of other forms of IP, patents remain a highly relevant innovation output of FP7 NMP projects. The 36% of projects that do register patents in SESAM account for a considerable volume of patents. Moreover, when looking at the different categories of IP types registered in SESAM, it is clear that patents account for the lion share (81%). Hence, in the following sections, we take a closer look at the patenting activities in FP7 NMP projects.

SESAM registration of patenting activities from FP7 NMP projects: the full

picture?

We resume that a total of 290 NMP projects are covered the SESAM database, and that 36% (n=105) of these indicate some record on patent activities. The total volume of patents registered

in SESAM amounts to 270. The distribution of patents over projects is shown in Table 3: 38 of the

projects register one patent record, 29 have two patent records and 18 projects have three patent records. The number of patents in one project varies between one and twelve.

Table 3 - Overview of distribution of identified patent records in NMP projects (n=270)

Number of patents Number of projects (which have the number of patent

records indicated in the first column) Frequency

1 38 36%

2 29 28%

3 18 17%

4 9 9%

5 3 3%

6 2 2%

7 1 1%

8 2 2%

10 1 1%

12 2 2%

Total 105 100%

14 The number of observations across this breakdown is too low to deduct any statistically meaningful statements about differences between the NMP subareas.

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False hits and false negatives As outlined above, 62% of the 270 SESAM-registered patents were retrieved in the PATSTAT database, meaning that the actual existence of 38% of the registered patents could not be

confirmed. Potential reasons include: registration of insufficient or inaccurate information in SESAM (obstructing retrieval in online repositories); wrongful registration as ‘patents’ of intentions to file a patent or invention disclosures (obstructing retrieval in online repositories); recentness of patent

applications (allowing retrieval in weekly updated online repositories, but obstructing retrieval in PATSTAT database15).

The presence of ‘intentions to file a patent’ in the SESAM database lends itself to further investigation of these cases by means of interviews. The results in this respect indicated that scientific coordinators, when asked about it, are often unaware of the current status of these intentions to file for a patent. Those who were still able to follow up the exploitable output of the

project frequently indicated that the patent was eventually not filed and that there is no intention to do so anymore; suggesting that a considerable share of these ‘intentions’ should not be counted as real patents. In addition, the interviews confirmed that a large share of the patent records for which the information provided in SESAM does not allow retrieval of the patents (insufficient or

incorrect information) were actually intentions to file or provisional (PCT) patent applications at the World Intellectual Property Office. The phenomenon of filing intentions that are not followed up, or that are abandoned, could partially be explained by the observation that in some consortia, the

information sharing on “possible exploitable outcomes” occurs in an early project stage. Later on, this information is not always updated (in a correct way).

Besides the presence of such ‘false hits’ (registered as patents in SESAM but for which in reality, no official patent application took place), assessing the coverage of SESAM in terms of project-related patents additionally requires a mapping of potential ‘false negatives’, i.e. patents that are likely but not officially related to the FP7 NMP projects. Two approaches were followed for identifying patents that are suspected to result from the project activities, but that are not registered in SESAM (we

refer to these as ‘shadow patents’).

Identification of shadow patents by family-membership

The first approach is straightforward in that it identifies all family members of SESAM registered patents that were retrieved in the PATSTAT database. For these patents, the relatedness to the FP7 NMP projects is certain. In order to get the broadest possible picture, the widest available delineation of the ‘patent family’ concept’ was used, whereby all patents linked to the same priority

document (i.e. the first ever patent application relating to the patented invention) belong to the same patent family16.

Table 4 summarises the result of this family-based extraction. It shows that almost 30% of core patents are ‘single’ patents, i.e. patents for which no family member was identified. For the remaining 116 core patents, a total of 309 family members was identified. Accepting the assertion that these family members are related to the identified FP7 NMP project activities as well, but not registered in SESAM, this implies that SESAM would account for only 35% of the actual patent

output of the projects17. More fine-grained diagnosis at the level of sub-programmes (breakdown table is available in Annex 3) reveals that coverage in SESAM is especially low for Materials and New Production Techniques (approximating 30%) and somewhat higher for Nanoscience &

Nanotechnologies and Integration (approximately 40%).

15 More specifically, it concerns a total of 34 patents that were retrieved in the online repositories, but with application dates later than April 2012. Due to the (minimum) 18 month time lag between filing and publishing of patent, these patents are not yet covered in the PATSTAT October 2013 version that was used.

16 This is referred to as the ‘INPADOC’ family definition. For a more detailed description of the coverage implied by this definition: see http://www.epo.org/searching/essentials/patent-families/inpadoc.html

17 Note that coverage may be underestimated. Were able to start the mapping only from the SESAM patents for which we retrieved a match in PATSTAT. As indicated earlier, 38% of SESAM registered patents (i.e. 102 patents) were not matched. Some family members may belong to this group of unmatched SESAM patents. However, even in the most extreme - and highly unlikely case - that all 102 non-matched patents would be family members, the coverage in SESAM would still be restricted to 44% of the actual patent output.

http://www.epo.org/searching/essentials/patent-families/inpadoc.html

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Table 4 - Results extraction family-based shadow patents

# shadow patents per

core patent # core patents % core patents

Total # shadow

patents

0 47 29% 0

1 53 33% 53

2 17 10% 34

3 16 10% 48

4 12 7% 48

5 6 4% 30

6 5 3% 30

7 3 2% 21

8 2 1% 16

10 1 1% 10

19 1 1% 19

Total 163 100% 309

A final remark about these family-based shadow patents is in place. Different patents belonging to the same family essentially refer to the same ‘invention’. To the extent that the monitoring of

innovative outputs of FP NMP projects requires taking stock at this ‘invention’ level, the registration in SESAM of only one patent per family makes good sense; and would even be advisable to avoid inflation of patent registrations in SESAM. At the same time, information on patent families is

highly relevant as an indicator of patent value: patents that are part of (larger) families are more valuable.

Similarity-based identification of shadow patents

The second approach for identifying ‘shadow’ patents is less straightforward, and requires more validation. It takes a wider scope by considering patents for which the characteristics are so similar to the core patents that they could be suspected to be related to the project activities. These ‘suspect patents’ can be identified by searching for patents that are similar on the level of the

following criteria (and excluding the 309 family members identified in the previous section):

Applicants: shadow patents share at least one applicant with the core patent

Inventors: shadow patents share at least one inventor with the core patent

Application year: shadow patents are applied for on the same period as the core patent (maximum 3 years before or maximum 3 years after)

Technology domain: shadow patents share at least one technology domain with the core

patent (IPC4 digit level)

Table 5 summarises the result of this similarity-based extraction of shadow patents. It shows the frequency distribution of the number of (suspected) shadow patents over core patents.

For more than half of the matched SESAM patents (i.e. for 85 core patents), at least one shadow patent was identified; with a total of 818 potential shadow patents for 77 core patents. This considerable volume again suggests that the registration of project-related IP (patents) in SESAM is very incomplete. More fine-grained diagnosis at the level of sub-programmes (breakdown table

is available in annex 3) reveals that this lack of coverage is somewhat less severe for Nanosciences & Nanotechnologies and – to a lesser extent – for the Integration sub-programme. For Materials, the coverage appears especially problematic.

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Table 5 - Results extraction similarity-based shadow patents

# shadow patents per

core patent # core patents % core patents

Total # shadow

patents

0 78 47.9% 0

1 29 17.8% 29

2 8 4.9% 16

3 8 4.9% 24

4 5 3.1% 20

5 5 3.1% 25

6 5 3.1% 30

7 2 1.2% 14

9 4 2.5% 36

10 1 0.6% 10

11 4 2.5% 44

12 2 1.2% 24

13 1 0.6% 13

17 2 1.2% 34

18 1 0.6% 18

20 2 1.2% 40

23 1 0.6% 23

32 1 0.6% 32

56 1 0.6% 56

91 1 0.6% 91

92 1 0.6% 92

147 1 0.6% 147

Total 163 100.0% 818

It should be noted that the above outlined criteria for identification of similarity-based shadow patents imply less certainty of relatedness than family-membership. Therefore, additional validation is required of the actual relatedness of these similarity-based shadow patents to the core patents and project activities. A first explorative validation was performed by a comparative

reading of project descriptions as well as titles and abstracts of core and shadow patents. The exercise confirmed that 77% (N=632) of suspected shadow patents indeed appear related to a core patent hence to FP7 NMP project activities. This implies that for each core patent in SESAM, an average of almost 4 shadow patents exist that are not registered in SESAM.

Conclusion: SESAM coverage

Several indications suggest the presence of false hits and false negatives in the SESAM-registered patents. Estimating the extent of both phenomena is not straightforward. This is partly due to the

inability of identifying all SESAM-registered patents (hence the impossibility to estimate which share of non-matched patents are actually false hits). Moreover, further expert validation of suspected shadow patents may be required by field experts. But even when taking into account these caveats, it is clear that the patent data in SESAM represent a non-trivial underestimation of the actual patent output of the projects, as the presumed volume of false negatives outweighs the

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volume of false positives. The lower bound for the underestimation18 amounts to 56% of all patents related to the project activities. The upper bound for the underestimation19 would imply that SESAM only covers 15% of all patents related to the project activities. As such, the registration

of patents in SESAM is to a non-trivial extent incomplete.

At the same time, the volume of patents that were successfully identified and matched to PATSTAT (n=163) provide a sound basis for further analysing FP7 NMP project-related patents. This set of

‘core’ patents (as they will be referred to) will hence be further analysed in the following sections.

Characterisation of FP7 NMP project related patents

This section provides a descriptive overview of the composition of FP7 NMP project related patents and their control patents. The characteristics are mapped that were used as criteria for matching core and control patents: applicant institutional type, applicant country, patent system, application

period and technology domain. The revealed similarity between core and control patents on these characteristics support the appropriateness of the selection procedure used for the identification of control patents.

Distribution over patent system Figure 1 shows the proportional distribution of core and control patents over publication authorities. The table with the underlying absolute figures is included in Annex 2. It can be seen that most of the patents registered in SESAM (44% of core and control patents) follow the PCT

route, filing their applications at the WIPO. In addition, there is a clear focus on European systems: the EPO and some large European national offices account for another 35%; whereas the USPTO accounts for only 6%). This is primarily due to the high share of European applicants (see the following section about applicant countries).

Figure 1 - Proportional distribution of core and control patents over patent systems

Distribution over applicant countries Figure 2 shows the proportional distribution of patents over applicant countries. The table with the underlying absolute figures is included in annex 2. Not surprisingly, European applicant countries are strongly represented, with the largest share of applicants being German or French. This is in line with the prominence of German and French institutes in the Framework Programmes as well in

the field of NMP (Pandza, Wilkins & Alfoldi, 2011). At the same time, these national contributions to the patent portfolios of FP7 NMP projects are not completely in line with the relative presence of the countries in the project consortia (cf. infra, table 11). The top five in terms of consortium

18 I.e. only taking into account family members and taking the unlikely assumption that all 102 non-identified patents would be family-members. In that case: 265 patents would be registered in SESAM and an additional 207 patents would be non-registered family-members.

19 I.e. taking into account family-members and similarity-based shadow patents, and taking the assumption that none of the 102 unidentified patents are among the false negatives. In that case, 163 patents would be registered in SESAM and an additional 941 patents would be non-registered patents that are in reality related the project activities.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

WO EP DE US FR GB OTHER

CORE CONTROL

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membership is almost similar (with high contributions of Germany, France, Spain and Italy), but the prominence of the UK as a consortium member is notably higher than its prominence as applicant country. This is primarily due to the fact that the most active UK organisation in terms of

consortium membership (University of Cambridge) does not contribute to the identified patent portfolio of the FP7 NMP projects.

Figure 2 – Proportional distribution of core and control patents over applicant countries

Distribution over applicant institutional types Figure 3 shows the proportional distribution of core and control patents over applicant types,

including combinations of types hence cross-sector co-patents. The table with the underlying absolute figures is included in Annex 2. It is important to note that WO patents were omitted for calculating this figure. In WO patents, unlike in other patent systems, all individual inventors are listed as applicants, implying a huge contribution of the applicant type ‘INDIVIDUAL’ and biased figures on the co-ownership of patents. The figure shows that about 94% of patents (core and control) are from a single instit