The role of Open Intellectual Property Platforms

Intangitopia has unfortunately remained dormant for quite a while now with all authors being busy with their jobs. This has certainly been true for myself too as I recently changed jobs to work in a startup within the medical device industry. But since I still do some research on the topic IP strategy within the Life Science industry I thought that I should write a blog post based on my latest article (co-published with Ulf Petrusson and Henrik Rosén at the Center for Intellectual Property, University of Gothenburg).

Global Technology Markets – the role of open intellectual property platforms

In the article we analyze the business phenomena where multiple stakeholders collaborate, package and transact upon technology in systems with ‘venture-market hybrid’ characteristics. We term these complex interactions, including the structures and stakeholders who build and participate in them, ‘open IP platforms’ in lack of a previous descriptive term. As many of our Intangitopia readers will recognize this concept captures much of the processes that are seen in open innovation, distributed innovation, open source, public-private partnerships and crowd-sourcing concepts. Activities on these platforms typically include collective gathering, creation and development of knowledge assets to which openness is regulated through the determined level of access, ownership and utilisation rights. We analyse how IPRs (Intellectual Property Rights) and contracts operate as a set of self-regulatory tools in the construction of platforms where technology is accessed openly but still is priced on what could be described as technology markets.

The impact of these platforms on new and developing technology intensive markets is evident and growing, though it is not yet fully clear what it is that drives the creation of such platforms, how the specific characteristics of the platforms should be understood, and what kind of markets arise as a result of these platform interactions, whether on the platform itself or in a market context where the platform participants can act as a single entity. If one wishes to understand the future of knowledge based business it will be necessary to understand and begin to answer these questions, as it is our strong belief that relating to open IP platforms, whether through participating or acting on the markets shaped by the platforms, will increasingly become a necessity. For this reason, the article presents a first attempt at answering some of these questions, by outlining the trends that have driven the emergence of the business phenomena we define as open IP platforms, and by presenting an initial concept for a framework model to understand and classify these platforms by their common characteristics.

A new collaborative logic - case study: GSM

A case study of the GSM (Global System for Mobile Communication) platform has been incorporated to illustrate a transition over time as a new logic for collaborative, market-based development coalesces. We describe a historic development that views patents as monopoly interventions in the free operation of the market. Something we argue to be a danger that need to be limited or surrendered if a common standard is to be developed. Our literature review shows a perspective on the patent as a tool through which actors can build a standard or platform for developing the standard as notably absent; at best, patents are seen as a necessary evil incentivizing innovative contribution. While it would be going much too far to say that there is not an inherent danger in the combination of strong individual IPR-based protection and the technology lock-in effects of standardization, it is our view of that it is possible and necessary to see patents as the building blocks enabling collaborative platforms such as GSM.

Framework

To further understand the underlying building blocks and enabling legal tools that provide the foundation for open IP platforms, we suggest a framework. The ambition to build platforms can only be approached by understanding the building blocks that create the platforms and design the platform characteristics. These building blocks can take the form of relationships or tacit connections, but our focus remains on the explicit legal instruments that build the platforms, and the role of IPR’s in the platform as constructive elements.

In the article we present frameworks for measuring the following parameters;

· Level of system/tool leverage

· Level of collaboration

· Level of public responsibility

· Level of platform governance

· Level of IPR claims

By applying the framework to the Innovative Medicines Initiative platform the tools that govern openness and stimulate creation of new knowledge markets are made visible based on the information in;

· IPR policies;

· Collaboration policies;

· Policies on exploitation of background and foreground;

· Membership fees and financing policies;

· Secrecy policies;

· Working guidelines and processes;

Application of the framework – Case study: Innovative Medicines Initiative

Our case study results shows that a novel creation of knowledge markets can be argued to occur whenever IP transactions – that provide access rights - take place between participants in IMI. By intellectually categorizing utilization of the generated project results in pre-competitive arenas (e.g. clinical trials and preclinical research) as IMI Research Use, an internal market is created where commercialization is not the end goal. The altruistic motives behind making tools available at little or no cost for the purpose of ensuring that pharmaceuticals are safe may be questioned by tool-supplying actors who do not normally perform clinical trials themselves. But the fact remain that an internal knowledge market with different conditions than standard commercially negotiated terms is the result. And by using the same research data with the intent to commercialize them (IMI Direct Exploitation) as therapeutic, diagnostic, screening, or recombinant tools - another knowledge market with completely different norms emerges.

The third, and arguably most radically different, ownership and access norms result when the generated results fall within the IMI Sideground definition. The outcome in this case can be interpreted as separating the generated results from the platform altogether and join the other assets of the creator’s proprietary portfolio, which have not been brought onto the platform. This means that the owner of Sideground can commercialize the results without having any access right obligations specified in the IMI IP Policy.

Since the rules and norms that govern the scope of the three knowledge markets are determined, before accession to a project, when drafting the Project Agreement – drafting this plays a major role. Successfully negotiating terms favorable to one’s self-interests is thus likely to be seen as a key activity for each participant. Developing the ability to clearly objectify and define Background, before negotiations are started, as well as implementing an intellectual asset management system to capture valuable results are consequently imperative factors to create strong market positions in these internal knowledge markets.

Conclusions

We see a development where intellectual property is increasingly used to claim early research. If we are to have platforms that increasingly make title claims on academic results, those platforms must also be capable of managing a structured contribution to the public domain to ensure that it is not impoverished by shortsighted commercial approaches. Both the ICT and Life Science markets are increasingly characterized by complex transactions of IP and cross-licensing, and we therefore need to develop and strengthen mechanisms for openness such as FRAND. This will be the only way to support proportionality and limit destructive ransoming of these platforms.

Our presented IMI and GSM examples demonstrate these issues from different perspectives. The GSM history, which by any measure is a successful collaboration, shows how a lack of structural clarity and central responsibility in open IP platforms can lead to unilateral royalty demands and the rise of complexities when trying to navigate the patent landscapes. In the case of IMI we can identify how mechanisms for sophisticated claiming of early stage research result. But also how this creates higher demands on the capabilities of universities and academic research institutions to wield these mechanisms appropriately and safeguard the public interest of independent and uninfluenced research.

Our collective abilities to develop open IP platform will in many ways define which kind of businesses that will be created and which business climate we will generate. The specifics of how to constructively develop these platforms to generate an appropriate business climate; how to safeguard public interests, build up public domain, ensure open and functioning markets, manage complex knowledge transfer and technology interdependence, etc., is a future discussion that we believe is both inevitable and vital to the construction of a functioning knowledge economy

Tobias Thornblad

(Contact via Twitter)

For the article in its entirety, please see:

Ulf Petrusson, Henrik Rosén & Tobias Thornblad: Global Technology Markets - The Role of Open Intellectual Property Platforms: Review of Market Integration August/December 2010 vol. 2 no. 2-3 333-392