Confidential Patents

In today’s globalized world, intellectual property is difficult to protect and laws are tough to enforce among distant, unidentifiable manufacturing hubs. Counterfeit goods and patent infringement have become common across the world.

The U.S. Customs and Border Patrol, which cooperates with several agencies to enforce intellectual property rights (IPR) by seizing counterfeit goods at the border, estimated that the MSRP value of these seizures totaled $1.35 billion in 2015.

The economic costs of this illicit trade spread far beyond imports to the United States. Countries like China have booming domestic markets for these counterfeit goods, making it difficult for authentic brands to maintain their reputable identities abroad and technological pioneers to protect their competitive edge overseas.

Source: OECD.

Furthermore, economic espionage is costing American companies hundreds of billions of dollars every year. The combination of IP infringement and theft destroys millions of U.S. jobs.

Foreign courts often have laws to protect American intellectual property, but they are rarely enforced without significant intervention from the effected companies. Successful foreign court outcomes depend on massive amounts of evidence brought forward by the company whose rights are in jeopardy.

Although trademarks remain difficult to protect abroad, patents are suitable for new safeguards that could prevent foreign competitors from piggybacking on U.S. innovation to the detriment of American workers. In particular, confidential patents offer a way to keep technical information non-discoverable to foreign competitors.

Take the example of a satellite manufacturer. The company has developed the best satellite technology in the world, but they face the dilemma of trying to keep their technology protected as trade secrets or by filing for official patent protection. If they choose the latter, they will have to divulge their technology to the entire world, and manufacturers in Asia could easily duplicate the technology under the radar.

Situations like this have become commonplace given the ease of access to online patent databases. If the U.S. Patent and Trademark Office provided an option to keep patents confidential for a period of 10 years, patents could regain their strength as an unquestionably useful tool for protecting innovation without stifling new inventions.

Companies need to see existing patents for two primary reasons:

  • Assess ‘freedom to operate’ without infringing on other patents.
  • Check which claims can still be patented.

The USPTO would assume the new responsibility of making verifications for people making these claim inquiries. For example, the satellite manufacturer would submit its patent claims to the office, and patent reviewers would comb through the confidential patents to see which claims are already patented, and no confidential patents would ever be shared directly with the company.

This new framework for patents would fulfill all of the core functions of the current system without the threat of intellectual property theft to companies operating in the States. Confidential patents could create major opportunities for the American economy to grow in an increasingly competitive global environment.