Why Hawai’i will be more competitive than U.S. when it comes to tech patents
HONOLULU — Hawaii’s economy is in a tough spot because of an estimated $2.4 billion in tech patents that it is not likely to be able to afford to pay out, according to a new report by a group of U.s. government and technology analysts.
The report released Wednesday by the Hawaii Public Policy Institute estimates that Hawai’is tech patent pool could fall by up to 6.4 percent by 2030, compared with the current state of affairs.
Hawaii’s tech patent law has long allowed the state to award patents to foreign companies, but its impact on the state’s economy has been much less clear.
The report says Hawai’ians patent pool is limited because the state can’t pay out more than about $2,000 per patent.HPI’s report, based on data from the U.K.-based IP Technology Index, estimates that by 2030 there are approximately 5.5 million patents in Hawaii, of which nearly half — 5.2 million — are in the high-tech sector, including software.
The institute estimates that the Hawaii tech patent industry employs around 1,000 people.
The U.N. Intellectual Property Organization estimates that around 10 percent of the world’s patents are in patent-infringement cases.
But the report says that the number of patent-related lawsuits is low because the U,S.
and Europe have different laws.
“Hawaii has not been a high-profile patent state and the impact of these high-risk patents is still a little unclear,” HPI Executive Director Michael Leventhal said.
“But we think it is possible that Hawaii’s high-technology ecosystem could be more productive than its lower-tech counterparts.”
Hawaii already is one of the most expensive patent-intensive states in the U of A, according the report, but it could see a sharp decline in patent litigation if the country is hit with a high patent number, according Leventhaal.
In the report’s baseline scenario, the state has about 8.5 patents per 1,500 residents, which would leave it with a patent pool of about 4.7 million patents.
The state could pay out $2 billion more in royalties than the U at the current rate of $1.2 billion per year if Hawaii can be as competitive as it is today, according HPI.
But it could still be less than $2 million per patent, compared to the current $5.5 billion.HPDI said its findings suggest that if Hawai’a is a high priority for foreign tech companies and is able to compete with U. of A for patents, it could be able find itself with a smaller pool of patents than its neighbors.HPUI also found that a lack of technology patents is limiting the number and quality of startups and smaller companies.
It said that while Hawai’as tech industry may be in better shape than many other states, it also has a smaller number of high-value patents than the rest of the U., with only about 1,600 patents issued for each of the states 4.5-million residents.
It’s unclear how long the state could remain a high cost for foreign patent applicants, but Leventhella said it is difficult to imagine that it will stay that way for long.
“The number of patents issued per resident is still too low to sustain any competitive advantage over other states,” Leventhala said.
“This means that if the UAW doesn’t come to terms with the HPUI findings, it’s not likely that Hawaii will be able in the near future to sustain its position as a high innovation economy.”