From Arms Race to Marketplace: The Complex Patent Ecosystem and Its Implications for the Patent System

Intellectual Property and Patents

Article Snapshot


Colleen Chien


Hastings Law Journal, Vol. 62, pp. 297-355, 2010


The author argues the patent environment has become more complex and understanding the system is necessary to fix it.

Policy Relevance

The patent arms race that led to the rise of defensive patenting has recently been joined by the patent marketplace, which has created a much more complex patent environment. Consequently, change to the patent system should be effected using the demonstration effects inherent in patentee behavior rather than simply legal changes.

Main Points

  • The “patent arms race” is the result of companies filing for hundreds or thousands of patents per year so that they reduce their risk of being sued and can operate freely in their industry.
  • The “patent marketplace” is a recent development wherein patents are bought, sold, and traded primarily for obtaining the licensing fees and to gain the freedom to litigate rather than to actually produce goods.
  • Companies in the patent arms race tend to have a wider range of patents in their portfolios while companies in the patent marketplace tend to have more narrowly focused portfolios.
  • The patent arms race and the patent marketplace form the complex patent ecosystem. There are practicing companies that use their patents to produce products and revenue and non-practicing companies that make money off the patents themselves.
  • There is great diversity between practicing and non-practicing companies because both types use patents both offensively and defensively.
  • Defensive patenting is blamed for leading to high-volume low-cost and quality patenting, patent backlog, and patent stockpiles. This is largely the result of the patent arms race.
  • An overlooked aspect of patent history is that patentees are greatly influenced by other patentees. This propensity can be used to change the patent system by improving patent quality and reducing patent hold-up.


Get The Article

Find the full article online

Search for Full Article