December 18, 2008

Symbiosis in open biotech constructs

In Marcus’s last posting he discusses the need for a new type of market rather than trying to jam a square peg into a round hole. I couldn’t agree more, and there are some clear examples in the biotech industry where there is a lot of talk about how new biomarkers will revolutionize the market and make the proprietors rich through licensing structures, while in reality there still is a lack of IP infrastructure to value, price and leverage these intangibles with the same effectiveness as tangible goods are handled in the material value chain. It seems distant to imagine that this will ever be the case, but history tells us that the future usually has a tendency to surprise us.

My hypothesis is that effective valuation and pricing to a large extent relies on a detailed understanding of how value propositions are packaged and how the underlying assets are discovered, developed and combined. Hence, I find it very interesting to follow how technology platforms are developing in the biotechnology field as these hopefully will provide a greater understanding of how assets may be transformed into property and capital. Many of the currently existing platforms that are claiming to be ‘open’ (e.g. ‘open source’, ‘open standards’, ‘open platforms’, etc.) still seem to be more in a visionary stage than actively managed structures and systems enabling collaborative value to be created. The biotech industry has seen a whole spectrum of these as of lately, e.g. Open Wetware, Biological Open Source (BiOS), Predictive Safety Testing Consortium, SNP consortium, Human Genome Project, etc.

Open platform: IMI
Innovative Medicine Initiative (IMI) is one of the more advanced examples that I have found among the existing open platforms. The initiative, as I brought up in one of my earlier blog posts, focuses on targeting the biggest bottlenecks in the drug development process. IMI is interesting from a number of perspectives as it is driven by the founding members, EU Commission and EFPIA, to create a competitive edge for the EU industry while making the drug development market work more efficiently. The beauty, in my opinion, of the constructed platform concept is the so-called “Research Use” in their IPR Policy. At a quick glance the Research Use clause appears to be just an alternative way of using the Foreground which excludes Direct Exploitation. However, the footnoted example describes application of the generated results “as a tool for research and clinical research in the discovery, development or commercialisation of pharmaceutical products by for-profit institutions and organizations”, which I interpret as a form of intellectual creation of an ‘open standard’ for the pharmaceutical industry. The result seem to be that innovations that fall within this definition can be accessed and utilized under fair and reasonable terms on a non-exclusive basis, for both platform participants and third parties.

However, it should be mentioned, that this is made possible partly on the expense of the long-term value visions of the participating biotech firms as these, from the build-up of this construct, will not be able to offer pharmaceutical products nor diagnostic tools as value propositions. The businesses of the biotech firms therefore will have to rely on the commercialization of earlier-stage technologies such as screening- and research tools instead. Hence, biotech SMEs will need to ask themselves where they see the highest probability that the highest value will be attained (research tool versus diagnostic tool) before deciding to join as there is a huge difference in developing something risky of high value on your own as opposed to share the risk in IMI at the cost of a lower return-on-investment in the end. Moreover, the two alternatives require completely different capabilities and tools to be successfully achieved.
It is simple to be critical to created constructs such as the IMI platform, but it is extremely difficult to creatively innovate sustainable solutions that both provide incentives for the small inventive actors while keeping up attractive incentives for the large financially secure actors. So, the question remains; is it possible to create efficient biotech open innovation models where all parts work symbiotically?

Tobias Thornblad

December 16, 2008

The IP Store?

During the recent weeks there has been heavy posting in the blogosphere regarding new breeds of IP companies, where RPX (covered here and here) perhaps have gotten most attention, with their interesting business model of being an anti-NPE. Also seeing much attention is two even more interesting breeds; Article One Partners ( covered here) and its open source cousin Open Invention Network (again covered by Securing Innovaton, here).
There is however more commotion in related fields like patent valuation, where the search for the golden standards still goes on (e.g. here ) and another conceptual thought on the subject here.
Yet another interesting new breed of service is launched by Stanford (discussed here) where IP related data will be public. Last but not least, the FTC hearings some time ago, both parties (Intellectual Ventures vs. "rest of the world") agreed that more data is something they all would like to see.
These recent postings have lead me into thinking what an IP marketplace could look like.

What is an efficient IP market?
I would believe that many people want to look at the IP market the way we have looked at every other marketplace the last half century or so. Now pursuing a thesis within Patent Valuation I can also conclude that academics sometime try and fit a square peg in a round hole with applying classical financial theories to an IP setting. The most striking being that not even all authors are clear on what a patent actually is and many also dive head into the logic of patents=products. Whether you are pro or con NPEs they at least crush that myth with their business model. Looking at a (IP) market with the view that it is a means of generating revenue elsewhere (i.e. products or services), then it is not difficult to see how people are working hard to closing the NPEs "loophole".

This has me thinking, how would this be handled, would you have to be a producing company to be able to litigate or perhaps wider use of cross licenses as damages or perhaps just less damages could be solutions. Anyhow - these are all complex and strive towards "fixing" an existing loophole. Arguments are often that litigation intensity and cost have people running away from patents and keeping things secret instead. I sometimes wonder if perhaps more effort should be put into building a new marketplace suited for IP rather than trying to jam IP into the existing product market.

What if all would change and instead of buying and selling patents, companies get more savvy and leverage licensing schemes instead and remaining the owner of the patent, thus not giving NPEs enforcement options. Now I know there are inherent flaws with this, where the biggest perhaps is the difficulties to match two parties. This is why I am so glad that the "big fish" seem united in thinking that more data is needed and I am also really exited about the new Stanford service. A part from those progresses I still believe that much can be done by just trying to build such a (or any other) marketplace from scratch and having legislators set the norms proactively rather than obtaining a large backlog and reacting to whatever loopholes people find. Just look at the way Apple constantly set the norms by setting up marketplaces like Itunesstore and Appstore.
So question is - is there a Steve Jobs in any PTO?

December 3, 2008

Obama message is shared under Creative Commons

The president-elect of the US, Barack Obama, has released the office of the president-elect webpage under a Creative Commons 3.0 Attribution License. Meaning that you are free to copy, distribute and remix the work, as long as you mention the source.

It is of course so, as IPKat writes, that politicians have an inherent interest to have their views spread to as large audience as possible. But, one really important thing is, to keep some level of control over the message you communicate. I do not think that this license issue of the website content will affect his presidency in any major way. It can and could very well be so that the collaborative nature of this has made him more popular.

There is however an interesting difference in the copyright statements on the official campaign site since it there is not explicit if you are allowed to remix the content. That you can print and distribute is ok, as long as you mention the source.

As I see it, there can both be good and less good aspects of giving away the possibility to use elements from websites and campaigns as the ones mentioned. Since all communication interfaces are part of the overall brand I believe that there needs to be a consistency when it comes to the message communicated. But in the age of access where the masses can, and probably will, do what they like anyway, it might be hard to control all uses.

So, it might instead be more beneficial to limit the access to some parts and use openness in other areas. Just as Mr Obama has done.

Johan Örneblad

December 2, 2008

Nextopia in practice on iTunes

Nextopia has proven itself through a new feature on iTunes, where you can see the top content in the store for this year. It is unfortunately not available in Sweden, so I have not been able to verify it. But anyhow, even though the movie The Dark Knight has not yet been released it has outsold all other movies this year on iTunes.

The value of the movie is more likely to be higher when it is out of reach but still at your fingertips. Following the same rational, it will probably sell less and for a lower price just after it has been released. Since we constantly are looking forward to the next big thing, the movie will not anymore be as satisfying if it is accessible for all.

That the pre-order outsells other similar products released in the more common way has been proven several times with the Radiohead album In rainbows released last year. Even though the pre-ordered albums were at a pay-what-you-like-price they outsold the band’s previous album.

In a time when we literally have everything at our fingertips, the things that are the most valuable are the things we cannot get. At least what we cannot get right away.

What we do not have can be imagined to be whatever we want. That is the life in Nextopia.

Johan Örneblad

December 1, 2008

Patent disclosure and SSO

The court has agreed that failure to disclose essential patents required by the standard setting organization is considered to be a waiver of the patent rights in relation to the standard.

It is interesting to read that the court in Qualcomm Inc. v. Broadcom Corp (Fed. Cir., Dec. 1, 2008) has taken the issue of patent disclosures in standard setting organizations to a new level. There is a separation between organizations where you are required to license your essential patents by default when entering in to the organization and the cases where you explicitly have to disclose the ones you have knowledge about. It sounds reasonable to agree with the court that even if there were no explicit obligaton to disclose, the members of JVT understood it as if they were to disclose. By not disclosing, Qualcomm put the other members in a false understanding of the position when they were deciding upon the new standard.

Since standards are as important as they are, especially in the ICT sector, they also have to be treated as if they are. The economic impact of setting a standard, although a RF one in this case, could be enormous and the investments huge. Therefore we need more understanding of this impact, both in the legal system but more importantly in the SSOs themselves.

I know that there is a rising interest from the actors to look in to the patent policies which I think is good. One could of course ague if it should be constructed to be RF or FRAND, but most importantly is that it is clear to the actors in the organization to have a common understanding. This is where the decision in this Qualcomm case might be a pointer in the direction of more clarity.

Johan Örneblad

Life goes Google, but what can you do?

Life Magazine has together with Google put a large amount of their image catalog online. But what can one use them for? And what will they use them for?

The initiative is really good, to be able to search through the 10 million images in the archive where only 3 % have been published previously. It has been applauded by the photo community as well as other actors. But the main question still remains to be explored; what are you allowed to use the images for?

Time Inc. EVP, John Squires says in the press release from 18th of November:

"We're delighted Google recognized the rich value of our photo archive and worked with us to bring it to millions of consumers. Consistent with the launch of the TIME Archive, PEOPLE Archive and the SI Vault, this initiative continues our efforts to build valuable new revenue opportunities from our rich heritage."

As of today, the only revenue streaming from the new online archive is the possibility to buy a framed copy of the image. That merchandize opportunity is of course one good way, but most certainly not the only one.

Usage rights

The key passage in the information which I have found on the topic of usage rights is from the above press release:

LIFE's Photo Archive will be scanned and available on Google Image Search free for personal and research purposes. Copyright and ownership of all images will remain with Time Inc.

This is well in line with Google’s ambition to provide information to the public and enhance their importance as the hub of all the information on the web. But as Greg Sterling writes on the subject on Search Engine Land, why do they not state this explicitly on the search page. When you look at any image, the only information on how to use the images are that they are watermarked with © Times.

If you look at the Q&A on the Life archive there are some information on the usage rights, but it is not in line with what is provided in the press release since it states that:

What can I do with the images I find from the LIFE photo archive?

You can browse and view the images you find, rate them, and see detailed information about the photographs. There is also a link to buy image merchandise provided by LIFE.

Information is good

Since the meaning with the archive drastically is limited without explicit information on the usage rights I would like to see more clear information in relation to the images. To be able to buy them framed is good, but what if I would like to use them in some other setting. For me, it is especially the research option which needs to be specified since use for private purposes are allowed within most jurisdictions.

Further monetizing

The other information piece missing is who to contact or how to act if you would like to use some of the images in a commercial setting. Imagine too be able to go through Google to license some of the pictures for any specific use. There are of course many image agencies online already, but why not at least link to the one to contact?

Johan Örneblad

[Through] [More on the topic here, here and here.]

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