Intellectual Property Rights in the 21 st Century - a Regulatory Tool to Promote Innovation?

Transcription

1 Intellectual Property Rights in the 21 st Century - a Regulatory Tool to Promote Innovation? INSEAD Innovation Breakfast Series Dubai, 26 May 2015 Dr. Nikolaus Thumm Senior Fellow European Commission Institute for Prospective Technological Studies

2 Presentation outline I. Introduction II. Open innovation versus proprietary knowledge III. Competitiveness IV. Economic value and IP strategies V. Intellectual property markets VI. Technology transfer VII. Intellectual property in the 21 st century 2

3 Overview of intellectual property Legal right What for? How? Patents New inventions Application and examination Copyright Original creative or artistic forms Exists automatically Trade marks Distinctive identification of products or services Use and/or registration Registered designs External appearance Registration* Trade secrets Valuable information not known to the public Reasonable efforts to keep secret 3

4 Some IP found in a mobile phone Trade marks: Made by "Nokia" Product "N95" Software "Symbian", "Java" Patents: Data-processing methods Semiconductor circuits Chemical compounds Trade secrets:? Nokia Copyrights: Software code Instruction manual Ringtone Designs (some of them registered): Form of overall phone Arrangement of buttons in oval shape Three-dimensional wave form of buttons 4

5 Examples of valuable intellectual Optional property Coca-Cola Harry Potter Apple ipod Instant camera DNA copying process 5

6 The "social contract" implicit in the patent system Reveal invention Get exclusivity so that others can learn from it and improve upon it! 6

7 Patents in nutshell basic principles Patents are not secrets, they are published Worldwide patents do not exist International applications do exist (PCT applications) Patents are bound to a territory (mostly countries) Life of a patent: maximum 20 years of protection Patents can be granted for new and inventive technology Improvements (by others) on existing patents is possible Patents can be owned by multiple applicants in dif. countries Patents are classified according to technologies 7

8 II. Open innovation versus proprietary knowledge 8

9 Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. [This paradigm] assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology. Henry Chesbrough, "Open Innovation: Researching a New Paradigm", 2006 Source: Chesbrough,

10 More Examples for "Open Innovation" LEGO Mindstorms (software/robotics): open source based on copyright strong reliance on trademark BiOS initiative (Biotechnology Open Source): open source based on patents and/or MTAs BMW Customer Innovation Lab (service ideas): all rights transferred to BMW 10

11 Open Innovation and Intellectual Misconceptions: Property Open innovation = Open source Open innovation = public domain Open innovation = no Intellectual Property Reality: Open source is one mode of open innovation Open innovation results can be protected or released into the public domain Open innovation needs a functioning IP system and an effective market of IP rights "The effective management of IP is crucial, not only in identifying useful external knowledge but especially to capture the value of a firm s own IP rights." (OECD Report 2008 "Open innovation in global networks") "From Intellectual property to intellectual partnering" (Chesbrough, 2006) 11

12 III. 'Competitiveness' 12

13 Total European patent filings 1 +5,2% +2,8% 1 Direct European filings under the EPC and International filings under the PCT 13

14 Technical fields 1 with the most applications (2012) 2 1 Classified according to the IPC and technology concordance table compiled by the Fraunhofer ISI for WIPO 2 Based on European patent applications filed with the EPO 14

15 European Patent Office top applicants

16 European Patent Office: Top patentees 2014 Analysis based on granted patents published in Rank Company Grants 1 SIEMENS AG SAMSUNG GROUP ROBERT BOSCH GMBH LG GROUP L M ERICSSON AB BASF SE HUAWEI TECHNOLOGIES CO. LTD PANASONIC CORPORATION GENERAL ELECTRIC COMPANY QUALCOMM, INC KONINKLIJKE PHILIPS N.V JOHNSON & JOHNSON SONY CORPORATION CANON INC AIRBUS GROUP

17 Main drivers: Filings from Japan/Asia EPO Filings: Geographical Origin ( ) (Average Annual Growth) 6% 7% 5% 24% Others (5%) CN (35%) KR (16%) % US (2%) % JP (7%) EPC (3%)

18 Patent Filings World Wide (Les Echos 11 avril 2013) 18

19 IV. Economic value and IP strategies 19

20 Intellectual property rights intensive industries: contribution to economic performance and employment in the European Union European Patent Office (EPO) and Office for Harmonization in the Internal Market (OHIM)

21 E.g. patent intensive industries 21

22 E.g. copyright intensive industries 22

23 E.g. trademark intensive industries 23

24 Intellectual property rights intensive industries: contribution to economic performance and employment in the European Union (EPO/OHIM 2013): 24

25 Importance of patenting Increasing economic importance of industrial property (IP) Increasing integration of IP in top-level business strategy, especially in high-tech industry Increasing strategic use of IP information (technology, market and technology watch) Increasing exploitation of IP value as additional source of revenue and benefits (licensing, patent auctions etc.) Upcoming legally binding rules to report on IP (e.g. accounting rules) IP enforcement (litigation, etc.) with increasing economic impact on companies (revenue, profitability, stock performance, etc.) 25

26 Share Erfasster of Gesamt-Portfoliowert, portfolio value, % % The value of patents Cumulated share of patents, ordered by patent value Kum. Anteil der Patente, geordnet nach Wert 5% really matter 15% matter a bit 80% are irrelevant Data for about 7000 EP-patents. Source: European research project PATVAL. 26

27 Source: PATVAL II survey, Torisi et. al

28 V. Intellectual property markets 28

29 Economic Theory of Licensing Licensing... increases exploitation of technology, increases diffusion of technology, facilitates vertical specialisation and division of tasks, but may reduce competition and innovation. Firms license in order to... leverage economic revenue from unused inventions, establish technologies as de facto standard, influence competition and stimulate market demand, expand the range of uses (markets), exchange knowledge (cross licensing), solve conflicts with intellectual property rights. 29

30 Licensing (EPO/OECD survey 2007) 20% of European patent owners license out Firm size: licensing activity U-shaped Companies from Nordic countries and UK license out more Motives for licensing out patents: 1. Earning revenue 2. Entering into cross licensing deals 3. Stop others from infringing your patents 4. Sharing technology with other companies Obstacles to licensing: 24% of patenting firms are willing to but not able to license Difficulty in finding licensing partners 30

31 Source: PATVAL II survey, Torisi et. al

32 European Commission expert group on patent aggregation (2015)* Mandate: "Explore the need for and identify the feasible options for EU level action to foster aggregation of patents that could be (partly) funded or in other ways promoted at the EU level." Specific tasks: explore the benefits, costs and risks of a potential creation of a partly EU funded IP financial facility, fostering the formation of patent pools, fostering the formation of other forms of IP aggregation. * groups/report_of_the_expert_group_on_patent_aggregation_- _2015.pdf 32

33 VI. International Technology Transfer 33

34 'How can licensing facilitate diffusion and implementation of renewables?' Technology Transfer via: Imitation Trade in goods and services Foreign direct investment Joint venture Cross-border movement of personnel Licensing 34

35 Patent rights and Technology Transfer Important factors for technology transfer access to real know-how from source companies (often "Trade secrets") suitably skilled staff scientific infrastructure favourable market conditions finance 35

36 Example: patenting trends solar photo voltaic technologies * Patenting between source country ( inventor country ) and countries in which IP protection is sought. Source: UNEP/EPO/ICTSD 2010: Patents and clean energy bridging the gap between evidence and policy 36

37 Developing countries important for IP related activities China; 25% India; 17% Brazil; 12% Other; 25% Russia; 10% Malaysia; 4% Thailand; 4% South Africa; 3% Source: UNEP/EPO/ICTSD 2010: Patents and clean energy bridging the gap between evidence and policy 37

38 Conditions for licensing or cooperation with DCs 'When your organization is making a decision whether or not to enter into a licensing or cooperative development agreement with a party in a developing country, to what extent would the following factors positively affect your assessment?' 50% 45% 40% Not a factor A basic precondition Significantly attractive condition Compelling reason 37% 37% 44% 42% 35% 30% 25% 28% 29% 25% 26% 27% 20% 15% 18% 13% 16% 15% 13% 14% 16% 10% 5% 0% Protection of intellectual property rights Scientific capabilities, infrastructure and human capital Favourable market conditions Favourable investment climate Source: UNEP/EPO/ICTSD 2010: Patents and clean energy bridging the gap between evidence and policy 38

39 Co-invention patterns a statistical analysis Co-invention indication for international cooperation : 12 % of mitigation technologies worldwide only 9 % of all inventions worldwide 23% of African mitigation inventions (with OECD countries) Almost no intra-african co-invention Africa s most frequent partners US, UK, Belgium, Germany, Sweden, France and Canada Adaptation technologies little co-invention mostly in desalination primarily with South Africa\ Source: UNEP/EPO 2013: Patents and clean energy in Africa 39

40 Conclusions (Africa) Africa has vast untapped potential for clean energy technologies Patenting activity less than 1% of CET patents filed in Africa focus on climate mitigation technologies (much less adaptation technologies) inventive activity dominated by South Africa foreign patenting mainly: OECD Countries (D, USA, F, UK...), almost no BRIC Rate of growth of patenting activity higher than world average Rate of co-invention much higher than in the rest of the world Little evidence of intra African co-invention and cross border patenting 40

41 VIII. Intellectual property in the 21 st century? 41

42 If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it. (Fritz Machlup 1958) 42

43 Patents as a regulatory measure Welfare Protection Problem area? Too much protection? Not enough protection? Feasible measures 43

44 Challenges for IP Systems? open, collaborative innovation asks for easy access to IP timely, simple procedures high presumption of validity of IP rights new business models focus on branding customer relation first-mover-advantage lock-in combinations of open and proprietary models new technologies/innovation processes might demand alternative forms of protection (license of right, shorter/longer IP terms, sui generis systems) enlarged public domain: e.g. for basic research tools, interoperability standards 44

45 What patent offices can do: Increase transparency, reduce complexity and costs Ensuring quality/validity of granted patents Improving efficiency Steering applicant's behaviour SME and University support Harmonisation of IP systems Sustainable situation for Service innovations, New business models, Open innovation systems? 45

46 Example: Patent Quality Workshop: EPO Economic and Scientific Advisory Board 'A high quality patent (a) satisfies the legal patentability requirements at a given patent office, (b) it has been granted, and (c) is likely to withstand invalidity proceedings in court or before an administrative body' Improve patent quality: -prior art search and disclosure -abstracts/titles -non-patent literature -ownership re-assignments -translations -reporting of prior art by applicants (prior art repository) -opposition and re-examination -international harmonization and cooperation -code of conduct

47 Example : Steer applicants behaviour Fees at EPO amount in EUR Filing (online) 115 European search 1165 International search 1875 Renewal for European application (3rd year) 445 Renewal for European application (10th year) 1495 Examination 1555 Opposition 745 Appeal 1240 Further processing (late payment) (50%) Further processing (other) 240 Claim fee (claim 16-50)

48 Filing fees vs. 100 Initial costs TRADITIONAL FEE STRUCTURE: ACCUMULATED CASH FLOWS OVER PATENT LIFE TIME Examination fees & internal renewals 50 millions Search fees vs. Search costs Internal renewal fees vs. Exam, Opposition, Appeal costs External renewal fees Final gap - excluding Patent Inf. costs etc External renewal fees vs. Opposition and Appeal costs 48

49 Significance of small and medium sized enterprises (SMEs) 49

50 Example: Supporting SMEs and Universities No. of SMEs Policy? Innocent non-users Professional users Knowledge about, use of IP protection 50

51 Example: Harmonisation; the Unitary Patent Same grant procedure as for classic European patent Appeal proceedings European patent application Refusal or withdrawal of application Limitation/ revocation/ opposition proceedings Filing and formalities examination Search report with preliminary opinion on patentability Substantive examination Grant of European patent At the request of the patent proprietor UNITARY PATENT for the territories of the 25 participating states The unitary patent replaces the individual effects of the European patent in the 25 participating states 51

52 The Unitary Patent: Advantages For inventors protection in one single step for the 25 states currently participating significant cost savings (translation, validation, administration) simplified validation procedure (instead of up to 25 different procedures) simplified and more cost-efficient renewal procedure increased legal certainty due to uniform litigation system For Europe optimal protection in the participating states as a whole better framework conditions for innovative companies and organisations simplified European protection mechanism for companies from outside Europe improved competitiveness of the European patent system 52

53 53

54 Recent conference on patents in the European Digital Single Market: 54

55 Thank you! Contact: 55