Interfacing Intellectual Property Rights and Open Innovation

As businesses increasingly shift to open innovation business models, they need to adjust their intellectual property rights management strategy. In particular, they need to determine how to interface the traditional “closed innovation” paradigm required to legally acquire IP rights with decentralized, open innovation processes.

This paper finds several challenges in reconciling IP law with the need for open innovation. First, there are always multiple claim holders who may have different interests. Second, open innovation requires openness in the communication and exchange of IP-related information. Finally, because all open innovation projects involve multiple claim holders – as contributors, investors, co-inventors and collaborators – a governance structure is needed that can help the parties involved to prioritize their claims.

This paper argues that intellectual property law does regulate the question of co-inventor, co-creator, and co-owner but does not regulate how these rights may be coordinated or managed, in what hierarchy. Unless openness is managed, the fluid communications that are crucial in open innovation will not occur. The authors of this paper find that openness in innovation is always managed either formally (through formal governance means i.e. contract, explicit firm policy) or informally (through community norms, trust and implicit corporate culture).

In the absence of proper legal safeguards for ownership of collaborative input, this paper advocates contract-based governance, rather than an informal model. This means that firms need to more actively and strategically manage the governance of their intellectual property. It also recommends IP law reform that considers the needs of joint collaborators in open innovation projects, to help protect against the currently restrictive claims of infringement in patent law.

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