Being open about IP
To sustain a population of nine billion people by 2050 the world is going to need increasingly socially-responsible and environmentally sustainable innovation.
Key industry sectors such as energy, water, agri-food and transport are already under pressure to move to more sustainable methods of production and consumption. However, there are barriers in the way.
A protectionist approach to IP is sometimes perceived to be one of these barriers. IP might be used to protect and prolong the life-cycle of existing technologies and systems, thereby making it harder for new and more sustainable technologies to be adopted. However, with societal pressure to move key sectors to more sustainable systems, there is a need to change this status quo.
Electric car manufacturer Tesla is doing just that. Tesla CEO, Elon Musk, ‘shocked’ the world in 2014 when he announced that his company was joining the open source movement and giving away its technology patents for free.
But why would a company that had worked so hard to develop and protect its technology from its global car manufacturer competitors suddenly give its technology away for free?
Tesla initially developed a patent portfolio to protect its technology from being copied by the big car companies. However, Tesla’s concern that the established automotive manufacturers would ramp up their production of electric cars and overwhelm Tesla never came to pass.
Instead, Tesla saw the electric car market stagnate at less than one per cent of total vehicle sales. So Tesla changed its strategy from trying to prevent others from building electric cars to trying to encourage others to build electric cars in an effort to stem “the enormous flood of gasoline cars pouring out of the world’s factories every day.”
One reasoning behind Tesla’s decision might be that more electric cars being built will result in more battery recharging stations being built – making electric cars become more visible and a more conventional choice.
Tesla believes that an open IP strategy can strengthen rather than diminish its position by building the size of the electric car market, and as a result, build its own share of the total automotive market.
Careful management of IP at a firm-level, supported by policy-level awareness can be a powerful instrument to support sustainability transitions in other industries too.
For example, energy supply is challenged by the rapid depletion of natural resources, air pollution and greenhouse gas emissions, nuclear risks and security of supply. With water supply we are restricted by water scarcity, pollutants, extreme environmental events such as flooding and costs associated with supplying water to communities in poor countries and remote communities.
The agri-food sector is also challenged to sustainably produce more food and address malnutrition in poor countries.
These solutions rely on new knowledge. As a result, IP is becoming increasingly important as global societies evolve to knowledge economies.
If the ownership of IP is fragmented in an industry it can slow down technology innovation and uptake. However, if firms open up their innovation processes and move away from traditional internally focused closed innovation cultures where IP is used to protect and prolong life-cycles we may see knowledge sharing leading to accelerated cumulative innovation cycles and a more rapid uptake of sustainable alternatives.
Open IP is well advanced and mature in the software and healthcare industries. In healthcare, for example, it has given access to life-saving medicines to millions of people, particularly in developing countries through patent pools, such as the Medicine Patent Pool. And it is becoming increasingly important for societies in the areas of social and environmental issues.
While producing medicines in developing countries relies on multinational pharmaceutical companies sharing their IP, small companies can also play strategic roles in helping society move towards more sustainable systems.
As technology progress is cumulative there will always be phases of closed IP for small companies to build-up their portfolio. For these companies, closed IP is being used as a strategy to make a social impact. For example, Nutriset, which manufactures food for famine relief, is protecting not only its invention Plumpy’Nut, but also its entire business model by patents.
Plumpy’Nut is a peanut-based paste for the treatment of severe malnutrition and can be administered at home rather than through a supervised hospital treatment. As a result it can treat more patients.
Nutriset says that it uses patents to enable the development of local production plants for Plumpy’Nut in developing countries from being taken over by global manufacturing sites in more developed countries. The local production of Plumpy’Nut helps with creating skills and employment in the regions where Nutriset’s product is most needed.
We hope to be able to enhance societal and environmental transitions by further study of the successful IP models of those companies that have either gone down the open IP route or chosen to protect their IP aiming for sustainable transition. Our research reveals how these different IP models can be used for sustainability transitions under different scenarios and how IP can be used to build a circular economy and increase sustainability through new business models.
IP Interest Group
The IfM runs an IP interest group for manufacturing companies where participants meet regularly to discuss IP-related issues from a business perspective, such as technology acquisitions or how patent data can be used to identify development partners. The group provides a trusted platform for its members to engage in in-depth discussions on strategically relevant IP topics.
For more information about the IfM’s research into IP or if you would like to join the IP Interest Group or Forum, contact Dr Frank Tietze: email@example.com
Strategic IP Forum
The Strategic IP Forum (SIPF) is an open event series launched in spring
2015 that focuses on strategic IP topics from a business perspective. SIPF brings together interested individuals from the Cambridge region and beyond including CTOs, portfolio managers, VPs, Technology, Heads of Innovation/IP/licensing from a range of manufacturing companies and sectors to engage in an IP expert community.
Contact: Dr Frank Tietze