So, welcome back for this very last video lecture for today. And let's briefly talk about sleeping patents, which are kind of an interesting phenomenon, because typically, you would want to register a patent because you want to commercialize it. Or do you? Let's have a look. So, this generally phenomenon, that we can see that companies often apply for relatively minor patents, which maybe economically sound, they have no intention of ever commercializing, right? So, minor patents, not particularly innovative. Why would you want to commercialize them? Well then to take a step back, why would you even register them? Well, the idea is a strategic one, and the strategic one is simply that you would patent innovations that are close to your main product. Because you want to prevent competitors from inventing a close rival to your own product. So, in other words, you want to maintain a monopoly position. You want to make it difficult for others who want to produce something that's fairly similar to your own product. Put yourself into the shoes of some innovator. That innovator has just come up with a new product. That new product is protected by a patent. But, of course, others, competitors, see that there are high profits to be made, and so as a result, they want to get a piece of the pie. So, they can't produce an exact carbon copy, because it's patent protected. But they could try to invent around, they could invent something that's fairly similar to the main product and get parts of that profit. Now, with sleeping patents this is going to be much more difficult. Because you're patenting stuff, that's related to your product, which means it's much more difficult to produce something, to invent something that's close to your main core product. Here's an example. The example of Xerox a couple of decades ago, was using sleeping patents to secure a monopoly position in the professional copier market. So, this, of course, is a new version but old copiers were also mainly used in offices, so professional copiers, and Xerox was one of the trailblazers, one of the innovators in this industry. Until some competitors or some would-be competitors started complaining. And they said well, you know it's very difficult for us to develop that technology. It's very difficult for us to actually do something that's similar to what Xerox is doing because Xerox is just patenting everything left, right, and center to their main product. So, competition authorities then reacted and asked Xerox to license these sleeping patents, i.e. to let other firms use these sleeping patents, to competitors. So, competitors can now use the innovations that Xerox registered, patented but never used. And the reasoning there by competition authorities was that this practice of registering of sleeping patents was hindering technological progress. And there was much more to be done with copying machines. So, there was much more improvement to be gained from copying machines. And Xerox by registering all these sleeping patents was hindering that progress. So, as we've just seen, with the example of Xerox, sleeping patterns can have a strategic impact of monopolizing a position or making a monopolizing position more stable. So, firms might have an interest in undertaking R&D in a field that's related to their current product. Even though, they're not really interested in commercializing the output of that particular R&D project and so, why? By patenting innovations that are close to their own product, firms can, of course, pre-empt potential competitors from developing similar products that might turn out as competitors to the own product. So this way, the can successfully decrease competition and secure profits from their current product. So, let me summarize all that we've learned today in the following video.
