ABSTRACT
This working paper examines how reforming the patent system can increase patent utilization, reduce systemic inefficiencies, and enhance dissemination of patented inventions to promote cumulative innovation.
It proposes a novel patent system – the Compensatory Patent System (CPS) – which removes injunctions and replaces them with economic compensation, such as mandatory royalty-only payments. Under the CPS, the traditional exclusion right is substituted with a right for the patentee to receive remuneration upon a finding of patent infringement. Royalty rates would be set administratively, published in an official journal, and updated periodically according to sector-specific classifications, such as the Cooperative Patent Classification (CPC) system.
As the legal remedy under the CPS is monetary rather than an injunction, infringement determinations could be handled by the patent office rather than courts. The CPS also expands the availability of administrative post-grant revocation challenges – such as EPO oppositions – either by eliminating strict deadlines or by allowing such challenges in connection with infringement-related actions beyond current time limits. Any adversely affected party retains the right to judicial appeal within a defined timeframe.
By offering a more accessible, predictable, and lower-cost enforcement mechanism, the CPS may incentivize a greater use of patents as tools for innovation and licensing, particularly in firms or industries where patents are often underutilized or held primarily for defensive purposes. Furthermore, the CPS aims to promote broader access to patented technologies and discourage opportunistic enforcement strategies (including free-riding or hold-out, hold-up, chilling effects).
This working paper provides an overview of the CPS, presenting a patent system designed to balance attractiveness for patentees, fairness to all parties, and societal benefit, while assessing its potential advantages and limitations in promoting innovation across diverse industries.
This is a preliminary working paper and part of ongoing academic research, shared to contribute to current scholarly discussion. It reflects work in progress and may be subjected to further refinement and development. A substantially revised and expanded version is currently under review at a peer-reviewed journal. Readers are welcome to provide comments or suggestions. Please do not cite or distribute without the author’s permission. The views expressed are those of the author. This working paper will be removed from SSRN once the journal version is published.
Triguero, Juan Antonio Nuñez, A Compensatory Patent System: A Proposed New Patent System Replacing Injunctions with Economic Compensation (November 4, 2025).
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