An Intellectual Property Strategysupporting Open Innovation

Arlindo Oliveira

The innovation process

Why do we need open innovation?

• "The most successful organizations co-create products and services with customers, and integrate customers into core processes."

IBM CEO Survey

• "We need diversity of thought in the world to face the new challenges,"

Tim Berners-Lee

• "When the rate of change outside an organization is greater than the change inside, the end is near”

Jack Welch

What is common to these companies?

• They all claim to use open innovation

• They all hold an enormous value in intellectual property

What changed in the last decade?

• Increasingly mobile highly trained researchers• More and more capable universities and R&D

centers• Funding agencies push for open publishing• Knowledge distributed more widely throughout

the world• Diminished hegemony of any particular

institution or company in any particular field• Increasingly open worldwide markets• The world is becoming flat…

A flat world

A flat world

• Widespread use of ITC is flattening the world• Everybody has access to scientific articles,

platforms, and experimental data.• Big data if free to anyone interested• Artificial intelligence, data mining, machine

learning are becoming utilities• Traditional IP approaches (patents) seem to

become (proportionally) less relevant

Example: the pharmaceutical industry

• Widely available information:– Health Outcomes – Mortality, Health, Illness, Behavior – Gene Banks, Tissue Banks, Biological Diversity– Genomics, transcriptomics, metabolomics, …– In silico modeling becoming more powerful

• Private company data– Heavily protected– In some cases, proprietary– Insufficient to perform studies comparable with publicly available data

• Bottom Line: – The Pharma World is becoming flatter– R&D becomes a race to find new drugs, before the competition– We need a flat world to create the next generation of drugs

• LEVEL I. OUTSOURCING: R&D Activity performed by vendors, universities, R&D centers, incubators.

• LEVEL II. LICENSING: R&D Activity in Collaborations, Joint Ventures, Technology Transfer, Crowdsourcing.

• LEVEL III. OPEN SOURCE: worldwide distributed R&D, beyond IP

Degrees of open innovation

Intellectual Property and Open Innovation at odds with each other??

• Intellectual Property RightsThe rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time.

• Open InnovationA paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market. Open Innovation is about innovating with partners by sharing risk and sharing reward.

What is the role of IP in Open Innovation?

Let’s discuss a partnership…Let’s discuss a partnership…

What is the role of IP in Open Innovation?

• Traditionally , IP has a defensive role: – Stop others from creating competing products– Enable competitor-free operation in a given market

• The new role of IP – Enables companies to enter in OI agreements– Limits risks of appropriation by partners– Guarantees fair value for all parties involved– Helps recoup R&D costs via profit sharing

• SMEs and RTOs depend on existing IP to protect their rights, when entering partnerships

IP rights in Open Innovation?

• Represent an opportunity to create new products and services, not a barrier to competitors.

• Unexploited IP becomes an opportunity to create value, not a recurrent cost.

• Non-used IP can be placed in the intermediate market or secondary IP market.

Ways to use IP in Open Innovation

• Knowledge exchange with other companies and RTOs

• Crowdsourcing

• Collaboration: joint ventures, R&D projects.

• Creating independent spin-offs dedicated to the development of a new project

• Licencing

• Joining a patent pool

Protecting IP in an OI framework

• Set up an internal filing system to track creation of IP assets

• Document each IP element (laboratory notebooks, datasets, experiments), providing proof of ownership

• Create an IP database and keep it up to date• Organising regular reviews of the status of

existing IP• Guarantee confidentiality of unprotected IP• Track internal usage of third party IP rights• Decide on the strategy for IP protection, in

specific cases

IP protection strategies may vary

• Is it product core technology, improvements, or peripheral functions ?

• What is the added value of the technology for the business ?

• Can the provider/partner compete with on the same market ?

• Is time to market more important than long term protection ?

IP protection strategies may vary

(source ideXlab)

Critical IP management issues

• Publish first, protect later no longer viable

• Fee for service contracting model vs. full-scale collaboration

• Close IP sharing contracts BEFORE it becomes valuable

• Define alternative dispute resolution mechanisms (ADR): arbitration, mediation, expert determination

• Avoid postponing legal issues

• Share IP ownership with employees and collaborators

• Define access conditions for partners and third parties

Joint ventures

• Contracts should address– Identification of IP owned by the parties before starting

the project– Allocation of the ownership of IP generated in the project– Access rights for project execution or exploitation

purposes.

• When joint ownership of new products/services, define:– Assignment of shares– Conditions of use and exploitation– Rules for IP protection, maintenance and monitoring– Governing law and jurisdiction, including use of ADR

systems

Lisbon – the innovation city

Downtown Rossio TraditionsNations Park Trams Belém TowerTagus River

Beaches