Another Wednesday, another Patent Connections column. This week I gave my take on “Open Innovation,” a strategy that has been gaining a lot of attention the past few years. While there are a number of blogs and websites out there to read about the details, definitions and executions of Open Innovation, one might simply think of it as “giving credit where credit is due.”
As someone who spends a lot of time tracking down IP owners for particular technologies, I definitely agree that a good idea can come from anywhere, which means I tend to be open-minded about benefits of “unconventional” ideas like Open Innovation. Keeping in the spirit of the post, then, I won’t be shy about liberally quoting from and linking to other companies and experts in this space as it helps drive home my overall point. The first useful resource I want to mention is Ben duPont’s post about 5 Open Innovation Mistakes Companies Make. Read Ben’s post for all 5, but I only wanted to talk about the first one:
Culture – Changing the culture to be receptive to outside ideas and technology requires more than one speech or memo. Changing the culture requires changing work habits and changing incentives.
Part of the culture change that is necessary is embracing technology licensing as a legitimate business in and of itself, and dropping the ridiculous notion that owners of IP shouldn’t receive credit for innovations they don’t personally commercialize:
Another culture change that can aid Open Innovation is to alter this misconception some people have that the marketplace should only reward people who implement technology, and not people who merely invent it. Mark Cuban, for one, speaks with disgust about companies “who have no intention of solving a problem or building a business but want to get paid by those that do.” If we’re going to have a patent system, however, then why shouldn’t companies be able to do exactly that? Consider this: should we allow doctors the choice to be OB/Gyn’s or pediatricians, or should Congress pass a law requiring all doctors who chose one specialty to do both? Ridiculous? Read on.The benefits of specialization have been written about for hundreds of years, and intellectual property laws take this concept a step further. Intellectual property can separate freedom to manufacture articles of commerce from the articles themselves. Some innovators may prefer to invent for invention’s sake, not wanting to be tied down to years of market research, product development, regulatory approvals and mass appeal. Such people are free to finance their future discoveries by licensing their inventions to implementers who are particularly skilled at dealing with the various steps of bringing a product to market. Similarly, the implementers may be less skilled at originating new ideas, and prefer to leave the inventing to the inventors. Companies have long practiced this type of specialization internally, by funding R&D departments and transferring viable ideas to product development. Open Innovation allows firms themselves to specialize in one or the other.
In other words, the whole world is entitled to learn as it pleases from anyone’s patent. The knowledge is transmitted around the globe, enlightening all who care to learn. But there’s a quid pro quo for the inventor. By making that knowledge known, the inventor gets to control (somewhat) who is allowed to put that knowledge to practical use.This feature makes patents particularly well suited for Open Innovation efforts. There may not be a particular need to develop infrastructure for trading technology. After all, it takes time to build trust for new platforms and concepts. Without specific IP protection, firms may be reluctant to share the most valuable technologies, fearful of not recovering its true value. Thus, the best technologies might go undisclosed. But the patent system has already proven itself to be a relatively robust strategy for disclosing technology to the world.