1. OPEN INNOVATION OPPORTUNITIES AND RISKS OF IP TRANSFER ACROSS BORDERS Robert D. Ford February 24, 2011 Innovation Across Borders Conference MaRS Centre, Toronto, Ontario

2. Gowlings

One of Canadas largest national law firms

750 professionals across 8 Canadian offices andMoscow andLondon

Cross-disciplinary:

Intellectual Property

Advocacy

Corporate Finance

Licensing, Strategic Alliances and Joint Ventures

Mergers and Acquisitions

Regulatory, Government Relations and ProductLiabilityservices

3.

Business Models forTechnology Commercialization

CLOSED INNOVATION - ruled the 20th century

OPEN SOURCE - emerged early 1990s

OPEN INNOVATION - emerged mid-late 1990s

4. Closed Innovation

20 thcentury Big Business model

based on internal / vertical commercialization

excludes external inputs ( except for institutional R&D )

USA, early 1900s - Europe & Japan early 1950s

heyday, 1950s-1980s ( Fortune 500 companies )

Increasing DECLINE 1990s to present

5. Closed Innovation Henry Chesbrough, 2003, Open Innovation 6.

free re-distribution of software in source code form

shared rights to use the technology

collaborative further development & sharing of the technology

no monetary rewards to the innovators

Open SourceIS NOTa sustainable business model

primarily used by electronic gaming industry & academia

Open Source( Principles ) 7.

mid-1990s Closed Innovation biotechnology commercialization ran into court battles over IP

Open Innovation(Drivers)

internal projects dropped by Fortune 500 companies= layoffs and unemployment

unemployed highly trained personnel started companies

realization that ~90% of IP was not commercialized

8. Open Innovation(Drivers)

explosion in electronic communications & media

powerful low cost/no cost internet search engines

appearance of fast-track commercialization clusters

evolution of OPEN INNOVATION commercialization

2000s 9.

takes advantage of others knowledge, successes & IP

Open Innovation(Principles)

accelerates speed of commercialization

based on rapid diffusion adoption imitation

requires brokering of knowledge & IP & collaborations

10. Open Innovation(Principles)

focus on extensive licensing:

• • licensing-in

• • licensing-out

• • cross-licensing

greatly expands value capture from protected IP

patents used as currency (not as barriers)

11. Open Innovation (How it works) Chesbrough et al., 2006, Open Innovation; Researching a New Paradigm 12. The Panel

Jennifer Thompson, V.P. Corporate Development & Investor Relations EnWave Corporation (TSX-V: ENW)

Dr. Yousef. Haj-Ahmad, M.Sc., Ph.D. President & CEO, Norgen Biotek Corp.

Mr. Martin Bonenfant, Intellectual Property Analyst, Medicago Inc.

13. The Discussion Questions

How does one protect IP in a global economy?

What does one "give" and what does one "take" in global collaboration?

Examples of "open innovation" best practices for SMEs?