CHAPTER 1: INTRO INTELLECTUAL PROPERTY
What is innovation?
Innovations are anything that generate new products, like services or ideas, that add value to a
company or has an impact on society. So, three criteria:
1. new and original products, services, ideas, …
2. which are used in a market or society
3. add ‘value’ to a company and/or have impact on a society
o they have to exceed the current level of innovation
o doing something new and add value, in comparison with the competitors
Examples: oral contraceptives, television, antibiotics, vaccines, Facebook, robots, …
Is there a need to innovate?
Yes, because:
- innovation is vital to competitiveness in the global economy
o it ensures that the economy continues to run
o it leads to improved goods and services for everyone
o governments implement policies to support the development of innovation:
§ to increase investment in research and development
§ to better convert research into improved good, services or processes
§ they realize that it is important for the well-being of the population to
promote innovation " governments stimulate innovation by funding
- companies that prioritize innovation, do better
o these companies experience the highest increase in turnover
- innovation affects the lives of everyone
o e.g. vaccines, the internet, mobile applications
o these can all improve the life of everyone significantly
Why the course ‘Patents and innovation’?
It’s important to understand the principle of intellectual property rights:
- these rights are an important part of the economy
- you are likely to be involved directly/indirectly with intellectual rights
o both personally as with a scientific degree: if you make an invention yourself
o both in industry and in academic environment
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,Industry and academics
Knowledge-based innovations are not only developed within the industry.
" public research organizations (universities e.g.) transfer knowledge and innovations to them
" industry is always looking for knowledge and technologies developed at universities
o this helps to develop a ‘knowledge-based economy’
o universities can generate income with this and helps the ‘common good’
o so there is a lot of interaction between the industry and universities
Innovation and the economy
Is intellectual property good for the European economy, balance of trade and job creation?
Yes! Europe published these results, which illustrate the answer:
- > 42% of total economic activity in EU is generated by IP-intensive industries
- 38% of all employment stems from industries with higher than average use of IP rights
- 90% of Europe’s trade with the rest of the world is with IP-intensive industries
Intellectual property
Basic principle of intellectual property rights
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,- Keeping it silent and not sharing it
o this is a personal gain for the inventor or company, but not for everyone else
o at the end, this is bad for the economy because others need to make the same effort
o the economy slows down
o nowadays, it’s quite difficult to keep secrets because of the mobility of people
- Making the products public and sell them: 2 options
o Not protecting the product
§ competitors copy the product and sell it at a much lower cost
§ the innovator is driven out of business because he made lots of investments to
invent the product " cannot earn his investments back
o Protecting the product
§ others cannot steal the invention
§ inventor benefit from knowledge and earn money
§ this money can be used to improve the invention or invent new things
§ overall: this is best for the economy
SO: or you make it public and patent it OR you keep it to yourself for personal gain but this is bad
for the economy
Basic principle of IP-rights
This illustrates the basic principle of intellectual property rights:
- We need to stimulate ‘innovators’ to publish their innovations
o not keeping them secret because this will not allow further innovations
o patents are published documents that protect your invention from copycats
- In return for publishing the invention, inventors receive a right to inhibit others from
commercializing their invention without permission
o innovators will be rewarded with intellectual property rights
o other people can also benefit from your invention – BUT: with a license
§ there is a cost for the individual user that goes to the inventor
• inventors earn their investments back
§ the economy is not slowed down: other people benefit from the invention
- basically: this is a contract between society and the innovator
o the innovator shares his knowledge but receives exclusivity in return
So, in conclusion: Why do intellectual property rights exist?
- To promote innovation by offering protection
- To give incentive to share knowledge so that other people can learn
- To give a contract between the society (receives knowledge) and the inventor (exclusivity)
" IP-rights might thus encourage to take risk and to innovate by temporarily inhibiting others to
copy your innovative research
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, Drug development and IP-rights
The development of drugs takes 15 years.
- clinical trials take a lot of time (to ensure safe medication)
- more than 90% of drug candidates don’t make it
o very high failure rates
o especially for diseases that target complex and poorly
understood diseases (like Alzheimer’s)
o costs are high: a lot of failures happen in phase 3 when
a lot of costs already have been made (= disaster)
§ end-points in phase 3 are not well defined " even higher failure rates
§ patient group in phase 3 is super diverse: drugs work differently in different
people " eventually, when averaging out, there is no effect
" fail of drug while it may be effective in some patients
IP-rights ensure exclusivity for the inventors " this is really important for the pharma-industry
- pharma-industry makes large investments: exclusivity is important to earn these back
- generics will be produced when the patent expires: exclusivity is gone
o original inventors lose a lot of income
o generic factories do not have to pay the expenses made in R&D
o this is really negative to invest in further innovation
Open innovation vs. traditional IP-rights
Open innovation is a distributed innovation process based on the fact that knowledge flows across
organizational boundaries.
" you give ideas, products or code away to drive innovations by means of global collaboration
" this is eventually good for any industry
" there is no exclusivity to the knowledge: everyone gives and takes
" e.g. open-source software, or open-source libraries like AOP-Wiki
SO: you give knowledge about the invention without exclusivity (≠patents, you don’t retain all
the rights)
Disadvantages of traditional IP-rights
- In some areas of technology, innovation occurs rapidly, and advances are incremental and small
o e.g. in software developing: there are a lot of players
o everybody develops tiny pieces of software which can be combined into a good product
o but with the current IP-rights you have to pay each developer that has made such small
piece and most of the time the costs are too high to pay them all
o
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