Transcript Document 7246405

Intellectual Property Law
The Need for Balance
Intellectual Property and Innovation
Manny Schecter
Associate General Counsel, IBM
[email protected]
May, 2008
Intellectual Property Law
IP in the Limelight
Balanced
Innovation
Balanced IP
Intersection
2
Almaden Institute, 2008
Intellectual Property Law
IP in the Limelight
Balanced
Innovation
Balanced IP
Intersection
3
Almaden Institute, 2008
Intellectual Property Law
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
4
Almaden Institute, 2008
Intellectual Property Law
IP is Central to Economic Growth & Competition
US investment in intangible assets (>$1T/year)
equivalent to investment in tangibles
% of GDP
14
“Intellectual property is the
backbone of America's economy”
U.S. Commerce Secretary
Carlos Gutierrez
12
Tangibles
Japan intends to “bring about a
nation founded on intellectual
property”
10
8
Japanese Prime Minister
Junichiro Koizumi
Intangibles
6
“The competition of the future
world is a competition for
Intellectual Property Rights”
4
Chinese Premier
Wen Jiabao
2
0
1954
~80% of the value of modern companies
comes from intangible assets
1964
1974
1984
1994
2004
Sources: US Federal Reserve – Nakamura, Ned Davis Research
5
Almaden Institute, 2008
Intellectual Property Law
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
6
Almaden Institute, 2008
Intellectual Property Law
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
7
Almaden Institute, 2008
Intellectual Property Law
8
Almaden Institute, 2008
Intellectual Property Law
Evolving IP Strategies
Growth
Income
Influence
Proprietary
Product Exclusivity
Cross Licensing for
Freedom of Action
1960
Industrial Age focused on
proprietary innovation
9
Almaden Institute, 2008
Enforcement
for Income
Leveraging for
Business Growth
1990
2008
Knowledge Economy based on
collaborative innovation
Intellectual Property Law
IP in the Limelight
Balanced
Innovation
Balanced IP
Intersection
10
Almaden Institute, 2008
Intellectual Property Law
More/Stronger Patents = More Innovation?
11
Almaden Institute, 2008
Intellectual Property Law
12
Almaden Institute, 2008
Intellectual Property Law
13
Almaden Institute, 2008
Intellectual Property Law
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
14
Almaden Institute, 2008
Intellectual Property Law
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
15
Almaden Institute, 2008
Intellectual Property Law
Plaintiffs in US Patent Litigation
Non-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
16
Almaden Institute, 2008
Intellectual Property Law
17
Almaden Institute, 2008
Intellectual Property Law
18
Almaden Institute, 2008
Intellectual Property Law
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
19
Almaden Institute, 2008
Intellectual Property Law
Patent Reform
More 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
20
Almaden Institute, 2008
Intellectual Property Law
IP in the Limelight
Balanced
Innovation
Balanced IP
Intersection
21
Almaden Institute, 2008
Intellectual Property Law
innovation: how?
New Forms of Collaboration
CEOs: Sources of new ideas and innovation
Employees (general population)
Business partners
Customers
Sales or service units
Consultants
R&D (internal)
Competitors
Other
Think tanks
Associations, trade groups, conference boards
Academia
45%
35%
25%
15%
Internet, blogs, bulletin boards
5%
5%
15%
25%
35%
45%
“We have...today a lot more capability and innovation in
the [competitive] marketplace...than we [could] try to
create on our own.”
Source: IBM Institute for Business Value, CEO Study 2006
22
Almaden Institute, 2008
Intellectual Property Law
The Changing Nature of Innovation
 Open
 Collaborative
 Multi-disciplinary
 Global
23
Almaden Institute, 2008
Intellectual Property Law
The Changing IP Landscape
Balanced Innovation
 Proprietary Innovation
 Income and Royalties
 Collaborative Innovation
 Interoperability
Open
Proprietary
A Spectrum of Collaboration and Competition
IP-only
Companies
24
Patent
Assignments
Almaden Institute, 2008
Patent Pledges
and Commons
Open Source
Software &
Open Stds
Intellectual Property Law
25
Almaden Institute, 2008
Intellectual Property Law
Standardization Cycles Promote Innovation
Open,
Standardized
Proprietary
Innovation
26
Almaden Institute, 2008
Proprietary,
Differentiated
Solutions
Intellectual Property Law
Striking the Balance Needed for
Collaborative Innovation
 Balance between proprietary and non-proprietary
 Today’s law should be neutral & support each
27
Almaden Institute, 2008
Intellectual Property Law
21st Century Demands Uniquely-Skilled People
 Cross-disciplinary programs
and degrees
 Fusing technical
competency with industryspecific knowledge and
business-process expertise
 Success requires open
collaboration among
academia, government and
industry
28
Almaden Institute, 2008
Intellectual Property Law
University-Industry Collaboration
IBM’s Open Collaborative
University & Industry Innovation
Summit, Washington D.C. & Summit
Team’s Open Collaboration Principles
Research Program
Announced in over 60
media outlets
Summit Team’s
Free Participant Use
Principles
Principles based on:
Announced in over 35 media outlets
Free participant use
•
Clinical Decision Support
•
Software Quality Research
•
Privacy & Security Policy Management
•
Mathematical Optimization
Fee free or reasonable &
non-discriminatory fee
based for non-participants
Informed participant
disclosure
Publicly shared
2008 Priorities:
More pervasive
acceptance of both
collaborative research
principles
Continued progress and
summit team expansion
Continued internal &
external education
Bill Bonvillian,
Legislative Director &
Chief Counsel to
August & December ‘05
29
Almaden Institute, 2008
December ‘06
June ‘07
Intellectual Property Law
IP in the Limelight
Balanced
Innovation
Balanced IP
Intersection
30
Almaden Institute, 2008
Intellectual Property Law
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
31
Almaden Institute, 2008
Intellectual Property Law
The Intersection of IP and Collaborative Innovation
32
Patent Policy
Patent Quality
Marketplace Wiki
Peer to Patent: Community Patent Review
IBM Patent Policy
Open Source as Prior Art
Inventors Forum
Patent Quality Index
Standards
Collaboration
Open standards
Open Invention Network
Standards for Standards (S4S)
Patent pledges
Open Document Format
University collaboration principles
Almaden Institute, 2008
Intellectual Property Law
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
33
Almaden Institute, 2008
Intellectual Property Law
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.
34
Almaden Institute, 2008
Intellectual Property Law
Thank You. Questions??
35
Almaden Institute, 2008