Intellectual property rights

The theme headlined, often abbreviated IPR, could provide almost unlimited contents, so my essay will necessarily just attempt to indicate some interesting resources in a field not without controversy.

For innovation, patents constitute an obvious IPR category, with, e g, software and media raising questions regarding copyright (and patents vs copyright) also. Most often, the existence of a patent system is regarded as a prime mover for innovation, but even that assertion has been questioned – quite often in the regular groups blogging Techdirt. The flip side is that growth may be spurred in the absence of a protection system, allowing for free copying. Since innovation is hard to measure, patenting, however cumbersome as a proxy, is often enough highlighted as an innovativeness index for nations.

The American professor Lawrence Lessig is found at the forefront in this debate, also a strong proponent of copyleft as an alternative to copyright. Linux is the best-known freeware while the largest portal to such free software, SourceForge, hosts more than 200.000 projects. The poet Lewis Hyde has argued for a creative commons, CC, in several books. And even Microsoft has some efforts operating under CC.

New technologies sometimes equate with problems for the patent system and two of these are software and business idea patents, where practices differ between countries. Another troublesome field is biotech: what about a patent description of 4000 pages or with the patent implying that a cell culture being deposited at the patent office, (impossibly) protected from mutating? Greg Aharonian is constantly upbraiding the US Patent Office for its clumsiness and inadequacy, sometimes leading to the invalidation of patents. Aharonian’s newsletter is poignant, witty, spiteful, and plain funny.

Most patent laws contain a number of caveats, one being that the viability of the suggested invention be demonstrated hands-on, this purportedly to prevent applications for perpetuum mobiles. Inventions of importance for weapons or more generally national defense may also receive special exemptions. Then there may exist a problematic one: that a patent must be practiced, not just filed to prevent others from applying it. On and off, there are discussions about purported patent trolls, individuals or companies that hoard patents without developing them into practice but with the sole purpose (that is the accusation) of blackmailing companies that seem to infringe on those property rights. Microsoft is a company that has not always looked benignly on freeware and it may be a bit ironic that patent roll accusations have been leveled at two well-known Microsoft alumni, Paul Allen who started the company in partnership with Bill Gates III, and Nathan Myhrvold, long-time CTO and now running a company in the ‘patent & innovation’ business with some Gates backing. Allen’s claims stem from work at an ambitious incubator, Interval Research, that he sponsored for several years but that never seems to have paid back on the ambitions.

In innovation management, IPR strategy or patent policy can be vitally important. Items included would be attitudes and actions regarding licensing, secrecy versus patenting, sometimes preferable when it comes to process innovation, and clever prophylaxis.

Pieces & Bits

There are of course a host of conferences, symposia, and seminars dedicated, entirely or partially, to innovation management, innovation at large, or subsets of innovation. Here just three organizations and their annual jamborees with at least some sessions or contributions on innovation, most often original and pioneering work. The most general one is the World Future Society, the world’s leading organization of futurists. Both the 2005 and the 2009 conferences, gathering more than a thousand people, had innovation as the theme. The WFS Capital Chapter, that is, the one for Washington, D C, publishes a newsletter, FUTUREtakes, that will feature one and possibly more special issues on innovation (I’m serving on the editorial board, so I should know! If you would be interested in contributing, please alert me.). As indicated by its name, the American Academy of Management (AOM) features broader concerns than innovation but its gigantic annual conference has lots of innovation contributions (you may look for TIM, technology & innovation management), found also in AOM publications. The European counterpart, consciously established just as such, is EURAM, the European Academy of Management, which features a special interest group on innovation.

Featured Law: Gresham’s Law

Gresham’s Law says that bad money drives out good, and refers to the fact that if for example the authority – a king, a reserve bank – starts diluting, debasing, gold or silver mint by alloying it with a less precious metal, all gold in circulation will swiftly disappear, substituted by the cheaper alloy. Gresham’s Law in reverse is when countries with “unreliable” currencies see an international currency like the dollar taking over as the tender to rely upon; more serious still when people controlling important resources like food-producing farmers hoard their produce rather than exchange it for money which is rapidly losing value and thus holds questionable value.

What is this Law if not an analog to a disruptive innovation, or sometimes just innovation? Disruptive innovation, following Clay Christensen (‘innovation guru of the decade’, though not quite without detractors), is something simpler substituting something more refined and advanced – but that simple disruptor is plain sufficient for doing the job at hand, or a new job at that. Following the pattern from Gresham’s mint, the consequences for the incumbent, the gold standard, would seem just frightening. Like with money, the substitution process threatens to be swift.

  • Per Wendin

    I enjoyed the article about when/when not patents are a good indication of how many innovations are created per R&D dollar spent (see This metric can be used both on a national as well as a company level and can, if used correctly, be a good benchmark. What I find more troublesome is a convincing argument that patents increase the value of a company, ie. is there a clear link between the (size/quality of) patent portfolio and the market capitalization of a company? I have studies some articles such as THE MARKET VALUE OF PATENTS AND R&D (Bronwyn H. Hall Grid Thoma Salvatore Torrisi) but I am still to be convinced. Has anyone got some better information?

    Per Wendin

  • Bengt-Arne Vedin

    Pertinent question! I think the answer would be a ‘no’ or a qualified ‘that depends’. If a company to a considerable extent depends on the licensing of patents, then obviously such protection is important (British Technology Group comes to mind, but smaller ventures have treaded the same perilous route). For quite a few companies, defensive patents, part and parcel of a barriers to others’ entry but also bargaining chips in cross-licensing deals, play a role where, depending upon industry, patents might seem statistically significant. Then again, as only indicated at in my post, the filing of process patents may be counter-productive since they are difficult to enforce while advertising and instructing the competition of something better kept secret.