Patent notice (failure) in the era of Patent Monetization

The most commonly provided economic rationale for the patent system is that it incentivizes inventive effort that may not be carried out in its absence. In addition to this utilitarian rationale, economic and legal scholars often refer to a second rationale that underlies the patent system – the dissemination of technological information to the public. This notice function is thought of as an important mechanism to enable a more efficient investment in innovation by stimulating further (cumulative) innovation, reducing wasteful duplicate innovative effort and limiting unnecessary litigation. Consequently, courts have placed a great deal of emphasis on the notice function and have described it as the ’quid pro quo’ of granting patent owners the right to exclude. Whereas the notice function is traditionally confined to the adequate disclosure of inventions, we propose that in light of the recent trend towards rapidly growing markets for patent monetization it should also encompass the adequate disclosure of the holders of rights to a patent. Specifically, in this paper we argue that in addition to knowing in detail the boundaries that define a claimed invention, knowing the identity of the parties that hold rights to this invention is a fundamental prerequisite for any patent transaction to occur. Based on a comparative analysis of the provisions of six of the most proficient patent offices worldwide, we illustrate that although current provisions warrant an adequate disclosure of the identity of the initial patent applicant(s), they provide the public with only limited opportunities to identify and track subsequent changes of ownership. Although most patent authorities require parties to file notice when the rights to a patent are assigned, provisions for strictly enforcing this requirement are absent. This allows for a lack of transparency concerning patent ownership, which may hamper rather than facilitate technology transactions.