March 26, 2009

A thought-experiment to test IAM/IPM capabilities in the business arena

Patent examination is discussed in an interview with Bo Heiden (deputy director of CIP) in a recent blog post in IAM magazine by Joff Wild. The topic of the discussion is on how to handle the current backlog in patent offices around the world. “Beginning in the 1990s the number of applications [at the USPTO] boomed, with a record 495,095 submissions during 2008. The backlog of unresolved applications has grown apace, increasing by nearly 73 percent between fiscal years 2002 and 2007 to about 730,000.”, at least according to Public Integrity. This backlog means that companies are forced to do business with non-granted patent applications. Heiden argues that this makes the status quo into something similar to a de facto automatic issuance system and therefore raises a provocative thought-experiment of a patent system without patent examination by the patent office. The patent offices would then, in the words of Mr Heiden, be “rubber-stamping authorities which merely certify that all the legalities associated with an application have been complied with”. This provocative stance certainly started some debate both in the blog comments and in other blogs where it was also discussed whether this was the same point that Lemley is making in Rational Ignorance at the Patent Office.

Switching the Onus of IP Awareness to the Business Arena
However, my personal interpretation of the discussion was that the whole point of the thought-experiment was to emphasize that companies are currently not accepting their full responsibility when it comes to IP. The status quo of patent prosecution seems to some extent be a closed procedure between administrative bodies and patent departments rather than an integrated core function to govern corporate strategy. Hence, the an interesting question generated by the thought-experiment is; if the onus was on the business arena to assess inventiveness, industrial applicability and novelty, would the right holders feel more of an obligation to only bring to the market patents for those inventions that would truly be determined as “strong” and “valid” patents? Moreover, as Joff describes in the blog post, if there were severe penalties in place for those bringing suits based on non-inventive patents - people would remain wary of litigating unless they felt that they had a very strong case.

Patents in a Knowledge Economy
The traditional view of patents as means to block as only function is somewhat being replaced in the emerging knowledge economy as structural building blocks instead. This is especially evident in knowledge intensive industries such as IT or biotech, where the role of patents serve as an important vehicle to package information into value propositions for transfer. In my perspective, it is important to realize that ownership of information does not automatically increase in value the more that others are being excluded. On the contrary, due to the compatibility that often exists between claimed information and others’ claimed information - collectivization may often increase the total value, although separate building blocks of information may (or rather: often need to) be proprietary. Investments in, and governance of, intellectual asset and properties therefore have the potential to drive wealth and growth in a creative transformation of R&D into products, ventures, commercial transactions and new markets. Examples of this creative transformation includes;
• early-stage and venture incubators,
• technology transfer offices (TTOs),
• spin-out companies,
• standardization platforms
• open innovation

Moral Obligation to Establishing IAM/IPM Capabilities
Building, rather than blocking, needs to be recognized as the core function of patents in the knowledge economy to generate wealth and drive growth. This means that IP strategy needs to be fully aligned with corporate strategy (or the other way around) to achieve envisioned business goals. Obviously non-core IP is likely to emerge along the way providing opportunities for further value generation, such as new markets, spin-offs, licenses, etc. As Mr Heiden rightly argues in one of his comments in the blog discussion: “the real challenge for us IP professionals - to be relevant to business not the PTO.”

Furthermore, my prediction is that the required IP awareness in this new economy will generate norms that interpret not-invented-here mentality as immoral (due to the costs of developing something yourself as opposed to license-in the technology).

These are certainly interesting times to follow the norm development within the IAM/IPM sphere in many industries.

Tobias Thornblad
(Follow me on Twitter)

Patent Examination in the Knowledge Economy, and other IAM/IPM capability topics, will be discussed further by prominent IP thought-leaders during CIP FORUM 2009, 6-9 Sep, Gothenburg, Sweden.

Recent article about another way to solve the patent backlog: Crowd-sourcing

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