Patent Issues in Open Innovation

Posted by Cheryl Perkins on August 11, 2014
patents_free photo labelled for reuse

Photo via greentechmedia; labelled for reuse

Today I am sharing a fantastic perspective on Open Innovation patent issues from a patent attorney. Who better to take this on than an expert, right?  John R. Harris’ intellectual property law practice focuses on assisting technology-based entrepreneurial companies in all facets of IP law, especially software and computer-implemented technologies. He is a partner in the Technology/IP Group in the Atlanta office of Morris, Manning & Martin, LLP and is a registered patent attorney.

 

Patent Issues in Open Innovation             By John Harris; reprinted with permission from the ABA’s Landslide publication

Many companies both large and small are embracing an “open innovation” approach to research and development (R&D), as well as marketing and supply chain. Forward-thinking management recognizes that not all good ideas are developed internally, and that hierarchical, bureaucratic internal R&D departments often cannot keep up with the frenetic pace of technology development. Companies that pursue open innovation (OI) strategies share some common traits:

  • They are willing and wish to source and use external knowledge, ideas, intellectual assets, and technologies to complement their internal capabilities.
  • They understand that such complements allow them to capitalize on opportunities, especially with the right intellectual property (IP) structure and strategy in place.
  • They wish to create new products, services, and processes.
  • They improve their processes.
  • They design new organizational systems and business models.

The current notion of open innovation is widely attributed to Professor Henry Chesbrough, who has written extensively on the subject and is viewed as the guru of open innovation. The premise of open innovation is, to some degree, that the ideas of many are often better than the ideas of a few. A company that wishes to have ideas for products, services, processes, and improvements flow to it must wrestle with the fundamental legal concept that inventors and authors initially own the rights to their creative endeavors. Ownership can be transferred, licenses can be issued, ownership can be abandoned—but these are legal events that affect relationships and have real costs. Just because innovation is deemed “open” does not mean that someone does not, at least initially, own rights in that innovation.

The laws and systems of intellectual property, particularly patents, are to some degree incompatible with open innovation. The subcultures of free and open source software (FOSS), copyright vs. copyleft, Creative Commons, and the open wireless movement are often mentioned in the same breath as open innovation. However, open innovation does not per se rule out the use of patents and other forms of intellectual property to protect the parties to an OI project. For example, there are literally hundreds of standards-setting organizations (SSOs) that deal with the complex interaction between a desire for openness and collaboration for certain key technologies and the fact that many players in certain industries have or are seeking patents on aspects of those technologies.

This article discusses some primary IP issues affecting open innovation, and is intended to provide an overview of some key issues currently affecting the OI world.

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