intellectual property law may, 2008 the need for balance intellectual property and innovation manny...

May, 2008

Intellectual Property Law

The Need for BalanceIntellectual Property and Innovation

Manny SchecterAssociate General Counsel, [email protected]


2 Almaden Institute, 2008

Intersection

IP in the Limelight

Balanced IP Balanced Innovation



Intersection

IP in the Limelight




To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to

their respective Writings and Discoveries

Purpose Innovation incentive Dissemination of information, including gateway to

additional publications

Use Traditional (exclusivity, defensive, offensive) Influence development of common platforms Mechanism for technology transfer and collaboration Gloss and credibility Marker for technical information



IP is Central to Economic Growth & Competition

0

2

4

6

8

10

12

14

1954 1964 1974 1984 1994 2004

% o

f G

DP

US investment in intangible assets (>$1T/year)equivalent to investment in tangibles

~80% of the value of modern companiescomes from intangible assets

~80% of the value of modern companiescomes from intangible assets

Tangibles

Intangibles

Sources: US Federal Reserve – Nakamura, Ned Davis Research

“The competition of the future world is a competition for Intellectual Property Rights”

Chinese Premier Wen Jiabao

Japan intends to “bring about a nation founded on intellectual property”

Japanese Prime MinisterJunichiro Koizumi

“Intellectual property is the backbone of America's economy”

U.S. Commerce Secretary Carlos Gutierrez



Patently Political

“So I call on the Congress to pass legislation that bans unethical practices such as the buying, selling, patenting, or cloning of human life.”

President Bush, state of the union address, January, 2008

“A system that produces timely, high-quality patents is essential for global competitiveness in the 21st century. By improving predictability and clarity in our patent system, we will help foster an environment that encourages innovation. . . . As president, Barack Obama will ensure that our patent laws protect legitimate rights while not stifling innovation and collaboration.”

Senator Obama campaign statement, November, 2007

“I firmly believe that part of the underpinnings of our strong economy is the protection offered by a strong U.S. patent system.”

Governor Romney campaign statetment, November, 2007



The Importance of Intellectual Property

Top CEO business priority: “Growth driven by innovation”

A new IP marketplace and economy is emerging

The idea has become the product

Increased competition for ideas

Strong, global intellectual property systems encourage innovation

Source: IBM Institute for Business Value, CEO Study 2006



Evolving IP Strategies

19601990

2008

ProprietaryProduct Exclusivity

InfluenceCross Licensing for Freedom of Action

IncomeEnforcement for Income

GrowthLeveraging for Business Growth

Knowledge Economy based on collaborative innovation

Industrial Age focused on proprietary innovation



Intersection

IP in the Limelight




More/Stronger Patents = More Innovation?



The Impact of Patent System Imbalance

“We estimate that the deadweight loss of a “loose” patent system from lost innovation is approximately $21 billion each year in private costs alone, or nearly $200 per household per year. This sizeable deadweight loss constitutes approximately 7% of annual R&D spending in the United States.”Ford, Koutsky, and Spivak, Quantifying the Costs of Substandard Patents: Some Preliminary Evidence, Phoenix Center Policy Paper Series, September, 2007



Top Defendants in US Patent Litigation# Suits, 2006-2007

Microsoft (43) Verizon (29) Target (28) Dell (28) Wal-Mart (24) HP (24) Apple (23) Motorola (20) Sprint Nextel (20) AT&T (19)

Source: Troll Tracker, December, 2007



Plaintiffs in US Patent LitigationNon-Practicing Entities

2006-2007 26% of overall infringement suits 50% of infringement suits against

large companies

3 months in late 2007 80% of infringement suits against

large technology and financial companies

Source: Troll Tracker, December, 2007



US Patent Reform Legislation

Harmonization Alignment with foreign patent laws First-inventor- to-file v. first-to-invent

Patent application examination Improvement of patent quality Post grant review without resort to

litigation

Patent infringement litigation Discouragement of inappropriate

litigation tactics Damages assessment



Patent ReformMore Than Just US Legislation

Reports from FTC/DOJ and National Academies

Patent quality initiatives USPTO Strategic Plan IP association activities Trends in judicial decisions Worldwide interest

Net: easily the most significant reforms to the patent system in decades



Intersection

IP in the Limelight




innovation: how?

New Forms of Collaboration

Source: IBM Institute for Business Value, CEO Study 2006

Business partners

Customers

Consultants

Competitors

Associations, trade groups, conference boards

Academia Internet, blogs, bulletin boards

Think tanks

Other

R&D (internal)

Sales or service units

Employees (general population)

5% 15% 25% 35% 45%45% 35% 25% 15% 5%

CEOs: Sources of new ideas and innovation

“We have...today a lot more capability and innovation inthe [competitive] marketplace...than we [could] try to create on our own.”



The Changing Nature of Innovation

Open

Collaborative

Multi-disciplinary

Global



Proprietary Innovation Income and Royalties

Collaborative Innovation Interoperability

Patent Pledges and Commons

Patent Assignments

Open Source Software & Open Stds

IP-only Companies

A Spectrum of Collaboration and Competition

The Changing IP Landscape Balanced Innovation

ProprietaryProprietary OpenOpen



ProprietaryInnovation

Open,Standardized

Proprietary,Differentiated

Solutions

Standardization Cycles Promote Innovation



Striking the Balance Needed for Collaborative Innovation

Balance between proprietary and non-proprietary Today’s law should be neutral & support each



21st Century Demands Uniquely-Skilled People

Cross-disciplinary programs

and degrees

Fusing technical competency with industry-specific knowledge and business-process expertise

Success requires open collaboration among academia, government and industry



• Clinical Decision Support

• Software Quality Research

• Privacy & Security Policy Management

• Mathematical Optimization

University-Industry Collaboration

August & December ‘05

Bill Bonvillian,

Legislative Director & Chief Counsel to

December ‘06

Announced in over 35 media outlets

IBM’s Open Collaborative Research Program

Announced in over 60 media outlets

June ‘07

University & Industry Innovation Summit, Washington D.C. & Summit Team’s Open Collaboration Principles

Summit Team’s Free Participant Use Principles

2008 Priorities:

More pervasive acceptance of both collaborative research principles

Continued progress and summit team expansion

Continued internal & external education

Principles based on:

Free participant use

Fee free or reasonable & non-discriminatory fee based for non-participants

Informed participant disclosure

Publicly shared



Intersection

IP in the Limelight




The Interdependence of Patents and Innovation

The patent system fuels innovation

The patent system has not kept up with the shift to a knowledge based economy

Innovations to the patent system itself are needed to bring the patent system into the 21st century



The Intersection of IP and Collaborative Innovation

Open Invention Network

Patent pledges

University collaboration principles

Marketplace Wiki

IBM Patent Policy

Inventors Forum

Open standards

Standards for Standards (S4S)

Open Document Format

Peer to Patent: Community Patent Review

Open Source as Prior Art

Patent Quality Index

Patent Policy Patent Quality

Standards Collaboration



How the Scientists Can Help

Automated prior art search techniques

Common software taxonomy and/or automated search of source code and/or flow charts

Automated extraction of level of ordinary skill

Analysis for Patent Quality Index

Central repository for patent commitments to standards organizations



Intellectual property will become

one of the key geopolitical issues

of the 21st century. Already, focus

has begun to shift from protecting

IP to maximizing intellectual

capital, which is based on shared

ownership, investment, and

capitalization.



Thank You. Questions??

intellectual property law may, 2008 the need for balance intellectual property and innovation manny...

Documents