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September 7, 2006
IPR - useful or useless
Amy Rowe has a great summary of the guts of the IPR debate on her blog - Do Intellectual Property Rights Help or Hinder Innovation? - Innovate Forum
Her bottom line:
Put another way, it’s what you do with the technology or intellectual property that matters – not the technology or intellectual property itself. In this regard, the philosophy “go ahead, let them copy us,” applies. Toyota, in particular, is noted for opening its doors to allow competitors to learn more about The Toyota Way, for example. Why aren’t they worried? Because by the time the competition catches on to what they’re up to, Toyota has already moved on, and is working on the next breakthrough product idea or innovation.
The reality is that Toyota, and other firms like it, are successful not because of a particular unique engineering or design feature – but because, overall, the company’s reputation for quality and customer satisfaction is off the charts. In short, it’s not because they own the rights – it’s because they own the market.
In other words, it’s the innovation embodied in the IP that matters, not the IP itself.
Only in one small area do I disagree. It is important to distinguish between core innovation and non-core. Core innovation is that which helps you own the market. In this case, maintaining strong IPR may or may not be the most important feature. Utilization is. And strong IPR may or may not protect that utilization. In such cases, IPR is essentially defense (but not in the sense that term usually applied). Your patent, for example, keeps someone else from patenting the technology in order to block you from deploying it in your utilization strategy. On the other hand, you might just as easily (and probably have to) license other parts of the technology in order to make your utilization strategy work. As Rowe points out in the article, there may be better mechanisms than the "I own it - you can't have it" model of current IPR.
For non-core innovation, there is different reason to own the rights - outside revenues. As IPR becomes a commodity to be monetized, then owning the patent is important to maintaining the royalty stream.
I suspect that this latter reason is behind the push for stronger and stronger IPR. In an age of continuous improvement and constant innovation, innovators don’t necessarily need an own-it-forever lock on their ideas. They need enough protection to keep others from using their (and others) ideas as a blocking device which would prevent the next innovation. Investors do need that strong protection. After all, they need some assurance that they can recoup their investment with a reasonable profit. As monetization grows, it will become more and more important to find a balance between these competing pressures.
Posted by Ken Jarboe at September 7, 2006 7:50 AM
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