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Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
Economics of Green Growth & National Innovation Strategies
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Economics of Green Growth & National Innovation Strategies

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Accelerating Green Growth is an urgent priority. Technologies and business models are complex, and there are many competing interests that need to be balanced. …

Accelerating Green Growth is an urgent priority. Technologies and business models are complex, and there are many competing interests that need to be balanced.

Overall, the ‘time to market’ for Green innovations is too long & we should explore a range of acceleration options

IP-based evidence and analysis can inform Green Growth National Innovation strategies

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  • 1. CambridgeIPEconomics of Green Growth:National Innovation Strategies& IPWIPO Forum on IP & Green GrowthDaejeon, Republic of KoreaQuentin Tannock, LLB (Hons), LLM (Cantab)CambridgeIP: Chairman, Founder © 2010 CambridgeIP. All rights reserved
  • 2. Green Growth: National Innovation Strategies & IP Accelerating Green Growth is an urgent priority. Technologies and business models are complex, and there are many competing interests that need to be balanced. Overall, the „time to market‟ for Green innovations is too long & we should explore a range of acceleration options IP-based evidence and analysis can inform Green Growth National Innovation strategies  Understanding IP-based trends  Improved understandings of technology-market systems  Identification of areas where more support or special treatment may be required  Identification of key participants / owners of technologies / sources of technology  Identification of networks of experts to improve innovation deployments  WIPO and national Patent Offices have a role to play and can make2 significant contributions © 20010 Cambridge Intellectual Property Ltd. All rights reserved
  • 3. Contents• Green context: Urgency, Complexity, Inter-dependency• Policy: Sample Impacts on Innovation rates & IP activity• National Innovation Strategies & IP• Conclusions• Acknowledgements• Appendix © 2010 CambridgeIP. All rights reserved 3
  • 4. Context: Public perception - December 2009 protestagainst climate change 4
  • 5. Context: Public Perception - March 2006 protest againstClean Technology (Wind) Source http://www.auchencorth.org.uk/images/wicker_turbine.jpg 5
  • 6. Context: Adoption, Deployment, Integration Challenges• Diversity & Integration challenges – Green Sectors and Value Chains are diverse, requiring diverse treatment – Many Green solutions require technology integration & inter-operability• Accelerating deployment of existing Green technologies – Our research shows that it takes between 19 to 30 years for top cited low carbon technologies to reach the mass adoption phase (CambridgeIP, Chatham House: 2009) Wind Energy: Composition by Technology Components – Some technologies, and business models, are „young‟ 7 ,000 and Application Areas and consequently relatively fragile 6,000 5,000 4,000 • Commercial confidence is lacking: Increases the positive impact of 3,000 2,000 public procurements & market guarantees (like Feed In Tariffs) 1 ,000 0 • Technology transfer „leading practice‟ and standard terms are often or gs d e s n te ag in at em ai la not yet established (what is „fair and reasonable‟ is not yet known) /W er or Tr re st en st Sy e e re G ad riv gy ho ol er Bl D tr ffs En & on O • In some sub-sectors there is a fear of patent litigation ox /C rb e ar ea ftw G So © 2009• International dimensions There are significant overlaps – Technology supply and demand is global between some of these sub- – E.g. Even where technology is not internationally spaces: revealing patents with created, it is internationally deployed usually with local multiple or systems-level claims © 20010 Cambridge Intellectual Property Ltd. All rights reserved 6 distribution/technology partners
  • 7. Contents• Green context: Urgency, Complexity, Inter-dependency• Policy: Sample Impacts on Innovation rates & IP activity• National Innovation Strategies & IP• Conclusions• Acknowledgements• Appendix © 2010 CambridgeIP. All rights reserved 7
  • 8. Impact of international deals: Impact of Montreal Protocolon medical inhaler industry (1) • Aside from Kyoto, the Montreal Protocol on CFCs was probably the highest impact international climate change deal done • There was massive industry impact & behavioral change – To choose just one example in the Health Sector, the CFC ban impacted many of the inhaler industry‟s key players – We identified two broad strategies for „inhaler industry‟ adaptation to the Montreal Protocol • pMDI space innovations: innovation in propellant formulations leading to increased propellants-focused pMDI patents • Moving out of pMDIs: A move into Dry Powder Inhalers, essentially „substituting‟ the need for a propellant – See the next slide for patent trends in these 2 areas © 2010 CambridgeIP Ltd. All rights reserved. 8
  • 9. Impact of Montreal Protocol on medical inhaler industry (2)• The 1987 Montreal Protocol introduced a range of control measures for the production and use of CFCs• This had a major impact on the inhaler industry overall, and pMDI manufacturers in particular• Two strategies emerged to deal with this market development, resulting in accelerated patenting pMDI space innovations in propellants based on Moving out of pMDIs: A number of companies moved the 2 HFAs that were allowed to be used (HFA 134a & out of pMDIs and into Dry Powder Inhalers 227) © 2010 Cambridge Intellectual Property Ltd. All rights reserved 9
  • 10. Policy works. Patenting has generally grown with deployment rate Wind Solar PV Annual PV shipments 25000 Annual Wind shipments 1600 4500 1600 Annual patents Annual PV shipments (MWp) Annual patents 4000 1400 1400 3500Additional installed capacity (MW) Patent filings 20000 1200 1200 3000 Patent filings 1000 15000 1000 2500 800 800 2000 600 10000 1500 600 1000 400 400 5000 500 200 200 0 0 0 0 6 8 0 2 4 6 8 0 2 4 6 8 0 2 4 6 197 197 198 198 198 198 198 199 199 199 199 199 200 200 200 200 6 7 8 9 0 1 2 3 4 5 6 7 199 199 199 199 200 200 200 200 200 200 200 200 10
  • 11. Contents• Green context: Urgency, Complexity, Inter-dependency• Policy: Sample Impacts on Innovation rates & IP activity• National Innovation Strategies & IP – Benchmarking & informing: Patents as Indicators, informing national strategies – Accelerating & enabling more effective IP based knowledge transfer – The central role of WIPO and national Patent Offices in innovation systems and strategy deployments• Conclusions• Acknowledgements• Appendix © 2010 CambridgeIP. All rights reserved 11
  • 12. Chatham House and CambridgeIP have developed a patent database focused on six Low Carbon energy technologiesA recently completed patent landscaping research effort by CambridgeIP andChatham House has sought to identify: Facts on the ground – to move beyond myths and to practical solutions Building blocks for technology transfer practices in the low-carbon energy space 1. Biomass to Electricity Chatham House and CambridgeIP have developed a unique collection 2. Carbon Capture of 57,000 patents and related 3. Cleaner Coal analyses focused on 6 areas of 4. Concentrated Solar Thermal (CST) energy technology 5. Solar PV 6. Wind Following the patent landscaping exercise, Ilien Iliev of CambridgeIP co-authored a report with Bernice Lee and Felix Preston of Chatham House: Who Owns Our Low Carbon Future? Full report available for download at Chatham House‟s website: www.chathamhouse.org.uk 12
  • 13. Informing national strategies: Geographical origins ofassignees indicate innovation strengths & capacities (1)• Aside from China, patent assignees are predominantly from OECD economies Netherlands 100% 90% France 80% % of all patent filings Denmark 70% 60% Canada 50% United Kingdom 40% Republic of Korea 30% 20% China 10% Germany 0% Biomass Cleaner Carbon CSP PV Wind Japan Coal Capture USA 13
  • 14. Informing national strategies: Geographical origins ofassignees indicate innovation strengths & capacities (2) • E.g. Note USA Carbon Capture strengths © 20010 Cambridge Intellectual Property Ltd. All rights reserved 14
  • 15. Informing national strategies: Decomposing patent filings intotechnology solutions provides information on technology trends • Decomposing technology sector trends into underlying solutions provides valuable information • PV: Note the relatively recent rise in Organic & Nanotech approaches © 20010 Cambridge Intellectual Property Ltd. All rights reserved 15
  • 16. Informing national strategies: Geographical location of globalpatent filings provides an indication of global technologymarkets • The USA generates much Carbon Capture technology, the markets for which are local and extra-local © 20010 Cambridge Intellectual Property Ltd. All rights reserved 16
  • 17. International cooperation & Technology transfer Transfer of wind power technologies from Annex I to non-Annex I countries: 1988-2007 OECD 2009. OECD Project on Environmental Policy and Technological Innovation © 20010 Cambridge Intellectual Property Ltd. All rights reserved 17
  • 18. International dimension: R&D collaborations • Unsurprisingly, national level collaborations dominate • Multi-national and National corporations account for over half of all collaborations © 20010 Cambridge Intellectual Property Ltd. All rights reserved 18
  • 19. IP analysis provides information on types of player: Thepublic sector is a key actor, and its role is likely to expand• Public-institution owned IP may be the easiest point at which we can implement innovative licensing practices Unknown 100% 90% University 80% SME 70% Patent filings 60% Public 50% 40% Other 30% 20% National 10% Corporation Multinational 0% Average Biomass Cleaner Carbon CSP PV Wind of all Coal Capture fields Universities own directly a relatively small proportion of total patents The „expanded patent footprint‟ is likely to be much higher: licensed tech & spin-offs 19
  • 20. IP analysis informs understanding market-technology spaces:Nanotech example CambridgeIP research reveals: • Higher inter-relation between patents in nano-field – Higher patent forward citation rates for patents relative to forward citation rates observed elsewhere – Rising strength of China: Rise in China patenting rates (accompanied by acquisitions of companies and technologies by Chinese companies) – Russia: Russian nanotechnology developments are often be overlooked in the English speaking world. Many clients have little or no exposure to patent and non-patent literature in Cyrillic. The role of RusNano? • Patenting rates slow down from 2004 in some nanotechnology sub-spaces, in part driven by: – Delays in patent filings (perhaps due to „time to market‟ and other considerations) – Fewer nano patents granted: Increased sophistication and rigor of the nano-patent examination process – Lower levels of VC investment: end of the honeymoon? • Multiple & varied technology areas with inter-dependencies and growing number of applications 1996: A relatively 2006: An „explosion‟ of small number of activity across an ever- IPCs is associated increasing array of with the industrial applications: no nanotechnology single „core area can be field discerned: indicative of a „raft‟ or a „platform‟ technology entering maturity 20
  • 21. Example of a national level, technology focused, IP audit: UK nanotechnology patent audit Client Profile Senior executives from a publically funded organisation approached CambridgeIP for assistance in mapping a broad section of the UK nanotechnology space Business Situation• A key driver was the need to inform our clients‟ strategy in this complex and patent intensive space• Our remit was to assist client executives develop a clear understanding of the existing landscape, identify areas of relative strength & weakness and existing R&D collaborations, analyse trends and provide statistical information & benchmarking data for use in business planning and stakeholder reports Our Approach• Working with CambridgeIP and senior industry experts we developed and implemented a complex patent search strategy• Results were analysed using our proprietary tools and methods and a focus area for deep analysis was identified• A workshop was conducted for client executives with our internal experts, assisting interpretation and dissemination of findings Results and Benefits• Identification of fundamental technologies and key actors • Insights into corporate R&D collaborations - identiifying key players in the• Identification of areas of strength together with technologies applicable to patent space, together with their overlapping relationships multiple sectors of application for future focus by our client • Independent and fact-based assessments of the client organisations• Understanding of recent M&A activity with significant impacts on the impact on UK IP assets, valuable in stakeholder reporting ownership of the UK‟s nanotechnology IP assets
  • 22. Contents• Green context: Urgency, Complexity, Inter-dependency• Policy: Sample Impacts on Innovation rates & IP activity• National Innovation Strategies & IP – Benchmarking & informing: Patents as Indicators, informing national strategies – Accelerating & enabling more effective IP based knowledge transfer – The central role of WIPO and national Patent Offices in innovation systems and strategy deployments• Conclusions• Acknowledgements• Appendix © 2010 CambridgeIP. All rights reserved 22
  • 23. Accelerate: Patent pools, cross-licensing & standards• Pooling, cross-licensing & standards arrangements can accelerate technology innovation and diffusion through, e.g.: Telecoms: European Telcoms Standards Institute – Inter-operability of components – Non-duplication of R&D efforts – Decreased risk of litigation – Broadening users and uses results in Medical Devices: Continua Health Alliance unexpected and novel uses of technology• Note: There are many many risks associated with these mechanisms Health: UNITAID patent pool © 20010 Cambridge Intellectual Property Ltd. All rights reserved 23
  • 24. Accelerate: Pooling, Cross-licensing & Standards for Green Tech – what next?• Identify candidate areas for pooling / cross-licensing agreements – Likely features: Increasing technical & patent complexity, litigation rates, relatively high speed of technology „life cycle‟ (past examples – telecoms & semiconductor sectors) – PV: e.g. underlying technologies for PV production, business models similar to semi-conductors sector – Cleaner Coal: e.g. high-end IGCC technology, – Carbon Capture: e.g. Carbon separation processes – around broad, fundamental technologies (e.g. enzymes-based carbon capture)• Identify candidate areas for standards agreements – Likely features: Increasing technical complexity, diversity of markets and users, requirements for inter-operability (past examples – telecoms & semiconductor sectors) – Wind: e.g. inter-changeability of components – gear/transmission, software systems, integration with grid – Smartgrid: e.g. communications protocols/software for smartmeters, hardware• Confirm there is a „critical mass‟ of willing participants? – See next slide for some of the drivers for company participation – Participants include: Public sector: Universities, Research institutes, public sector buyers, SMEs; Private sector: Procurement strategies (housing builders, utilities), SMEs, Multinationals with compatible IP strategies, other industry technology standards bodies © 2010 Cambridge Intellectual Property Ltd. All rights reserved. 24
  • 25. Accelerate: Why do companies enter cross-licensing, pooling & standards arrangements? Considerations Rationale ExamplesRemain a In a rapidly changing industry: remain at Motorola: semi-conductor cross-licensing the head of technology change Nokia: licensing of technology to Siemenstechnology leaderAvoid litigation Low-cost/reasonable royalties for use of Motorola: non-discriminatory/blanket 5-year technology: cheaper to license than to risk renewable agreements to both competitors and(defensive and litigation othersoffensive)Accelerate Expose your technology to greater Nokia: licensing of technology to Siemens number/type of usersinnovationRevenue generationUnilateral licensing out of key IP can Motorola: semi-conductor licensing was generate significant revenues generating $50mln p.a. in 1990s IBM: licensing out of IP that’s not being used: 100s $mln p.a.Protect value chain Meet challenge to leadership outside of Nokia licensing of S60 platform to counter industry – retain leadership of the Windows Mobile entry threatagainst big outsider industry Symbian Foundation: royalty-free licensingentrants model to protect against Google Android & Apple‘Increasing the pie’ Change model to redefine the market Revenue sources for Smartphones are changing boundaries & increase services accessible from calls to data and content – even payment on back of platform services (e.g. Visa mobile payments solutions) © 2010 Cambridge Intellectual Property Ltd. All rights reserved. 25
  • 26. Accelerate: Some of my suggestions – „low hanging fruit‟• Invest in developing model contracts for R&D collaboration, IP acquisition and licensing – Transactional costs are reduced when parties can work from standard model templates, negotiations start from a fair and well-understood basis – A good example are the „Lambert‟ Agreements implemented by the UK government for University/Industry R&D collaborations• Establish databases on licensing terms & leading practice – Establish benchmarks, encourage transparency & standardisation, share leading practices – Organisations like WIPO might play a role, and licensing terms could be published in the database• Expand ‘Green fast-track’ Patent Office initiatives – E.g. UK IPO‟s „fast track for Green patents initiative: See my Blog article on this topic here - www.cambridgeip.com/blog/archives/102.html• Capitalize on the existing, massive, global technology library represented by over 50 million patent documents – it‟s currently under-utilised – Sectoral mapping & multi-ontology database creation 26 – Technology mapping: IP Landscapes ®© 2010 Cambridge Intellectual Property Ltd. All rights reserved
  • 27. Accelerate: Some of my suggestions – „higher fruit‟• Encourage private sector investment by supporting the creation of investment „platforms‟ – E.g. Low Carbon Investment Indices with major bank participation• Manage risk through the establishment of insurance options – E.g. Insurance to manage IP litigation risk in key technology- market sectors• Adopt Alternative Dispute Resolution (ADR) measures to set „fair and reasonable‟ (FRAND) licence terms – E.g. Mediation, Expert Determination, Arbitration © 20010 Cambridge Intellectual Property Ltd. All rights reserved27
  • 28. Enable: Expertise is required• Even in mature, well-understood, market-technology sectors there is a need for expertise to adapt & deploy technologies• Challenge: Identify and engage with willing experts  IP data can help identify most the prolific and most networked experts in technology spaces  Platforms like Boliven.com house Innovation NetworksTM where experts are grouped (and group themselves) Network analysis Visualising collaborations revealed in a 10,000+ patent dataset in an area of strategic focus Blue: Inventor © 20010 Cambridge Intellectual Property Ltd. All rights reserved 28 Red: Owner
  • 29. Contents• Green context: Urgency, Complexity, Inter-dependency• Policy: Sample Impacts on Innovation rates & IP activity• National Innovation Strategies & IP – Benchmarking & informing: Patents as Indicators, informing national strategies – Accelerating & enabling more effective IP based knowledge transfer – The central role of WIPO and national Patent Offices in innovation systems and strategy deployments• Conclusions• Acknowledgements• Appendix © 2010 CambridgeIP. All rights reserved 29
  • 30. The central role of WIPO and national Patent Offices Maintaining the global patent library & continuing to improve accessibility: E.g.  Improved language translations  Thematic Patent landscapes, showcasing particular technology spaces and national patent assets  E.g. Development Agenda Project DA_19_30_31_01 (“Developing tools for Access to Patent Information” WIPO project document CDIP/4/6), concerns „Patent Landscape reports in various fields of technology, including Public Health, Climate Change/Environment/Energy, Food and Agriculture‟. Measures to support green patent filings  E.g. UKIPO „Green Track‟; USA Accelerated Examination: See my Blog Article on this topic here - www.cambridgeip.com/blog/archives/102.html Facilitating international co-operation in Green IP spaces  E.g. Coordinating with FAO, WHO, UNCTAD, UNCSTD and other international organisational stakeholders• Is other WIPO/PO support to Green innovation deployment possible? • E.g. Facilitating development of Green IP Licensing and Standards regimes? Facilitating the development and promotion of model R&D and licensing contracts for selected Green technology sectors? • E.g. Assisting establish inter-national patent pools and patent funds? (See for example the proposed „SEE-IFA Cross border Patent and License Fund‟ proposed 30 for South East Europe in an EU-funded project) © 20010 Cambridge Intellectual Property Ltd. All rights reserved
  • 31. Contents• Green context: Urgency, Complexity, Inter-dependency• Policy: Sample Impacts on Innovation rates & IP activity• National Innovation Strategies & IP• Conclusions• Acknowledgements• Appendix – OECD Green Growth Strategy overview – USA Innovation Strategy overview – OECD National Innovation Systems review overview – Diversity of Green Energy Sectors – Notes on WTO,TRIPS & UNFCCC provisions – Stern Review: IP related extracts – Case study: Licensing regime options – Contact us © 2010 CambridgeIP. All rights reserved 31
  • 32. Green Growth: National Innovation Strategies & IP IP-based evidence and analysis can inform National Innovation strategies  Understanding IP-based trends  Improved understandings of technology-market systems  Identification of areas where more support or special treatment may be required  Identification of key participants / owners of technologies / sources of technology  Identification of networks of experts to improve innovation deployments Overall, the „time to market‟ for Green innovations is too long & we should explore a range of acceleration options WIPO and national Patent Offices have a role to play and can make significant contributions 감사합니다 © 20010 Cambridge Intellectual Property Ltd. All rights reserved32
  • 33. Our contact details Ilian Iliev Quentin Tannock (CEO and Founder) (Chairman and Founder) ilian.iliev@cambridgeip.com quentin.tannock@cambridgeip.com GSM: +44-077-863-73965 GSM: +44-077-8621-0305 Internet Resources Corporate Office Website: www.cambridgeip.com www.boliven.com Cambridge Intellectual Property Ltd Blog: www.cambridgeip.com/blog 8a King‟s Parade, Cambridge CB2 1SJ, United Kingdom Sign-up for our Free Newsletter UK: +44 (0) 1223 370 098 on our Home Page Fax: +44 (0) 1223 370 040 33 © 2010 CambridgeIP. All rights reserved
  • 34. Contents• Green context: Urgency, Complexity, Inter-dependency• Policy: Sample Impacts on Innovation rates & IP activity• National Innovation Strategies & IP• Conclusions• Acknowledgements• Appendix – OECD Green Growth Strategy overview – USA Innovation Strategy overview – OECD National Innovation Systems review overview – Diversity of Green Energy Sectors – Notes on WTO,TRIPS & UNFCCC provisions – Stern Review: IP related extracts – Case study: Licensing regime options – Contact us © 2010 CambridgeIP. All rights reserved 34
  • 35. Acknowledgements• CambridgeIP – The entire team but especially contributions by my colleagues, Ilian Iliev (Energy) and Arthur Lallement (Inhaler Devices)• Chatham House – Bernice Lee and Felix Preston • Read the Chatham House / CambridgeIP report: Who Owns Our Low Carbon Future? Intellectual Property and Energy Technologies (download from www.chathamhouse.org.uk) © 2009 Cambridge Intellectual Property Ltd. All rights reserved35
  • 36. Contents• Appendix – OECD Green Growth Strategy overview – USA Innovation Strategy overview – Diversity of Green Energy Sectors – Note on WTO and TRIPS – UNFCCC provisions – Stern Review: IP related extracts – Case study: Licensing regime options – Contact us © 2010 CambridgeIP. All rights reserved 36
  • 37. OECD Green Growth Strategy Overview © 20010 Cambridge Intellectual Property Ltd. All rights reserved37
  • 38. USA National Innovation Strategy overview © 20010 Cambridge Intellectual Property Ltd. All rights reserved38
  • 39. Diverse Green Energy Focus Areas Wind Energy Nano Devices Fuel Cells Systems & Materials Advanced GeoThermal Biomass Refrigeration Energy Clean Coal Systems Photovoltaic & Carbon Capture Component CO2-EOR Refineries, Technologies Power Gen, Marine Co-Gen. Concentrated Transport Consortia & Solar & Other Smart Research Energy Storage Grid Alliances Systems © 2010 CambridgeIP. All rights reserved39
  • 40. National Innovation Systems: OECD review• OECD is undertaking a review of national innovation systems – OECD view of innovation systems: A flow of knowledge > In various forms (e.g. research collaborations, patent licenses, equipment sales, etc) > Between various types of actors (e.g. research institutes, corporations) > Acknowledging the role of „clusters‟, groupings of actors linked to particular localities (e.g. the high-tech cluster in Cambridge UK) • Need to acknowledge Patent Offices as actors in national and international innovation systems – „Oslo Manual‟ based surveys concentrate on manufacturing and services innovation at the corporate level, focusing on „technologically new or improved products and processes (or TTP) in the mid-1990s. Impact (i.e. results) and inputs are assessed.• Need to acknowledge non-explicit elements of systems – Tacit knowledge exchange mechanisms: E.g. trade secrets, non- patented innovations, education – Human Resources: Requirements for human expertise to interpret and deliver most technology systems © 20010 Cambridge Intellectual Property Ltd. All rights reserved 40
  • 41. WTO & TRIPS• Trade Related Aspects of Intellectual Property Rights – Uruguay Round of negotiations (1986 – 1994), Patents continue to be discussed in the Doha Round (2001 - ) – An attempt to standardise rights protection and dispute resolution, with minimum reciprocal levels of IPR protection • National Treatment, Most Favoured Nation Treatment • 20 year term of patent protection • Reinforces Paris and Berne Conventions on IP – Provision for compulsory licenses where attempts at achieving reasonable commercial terms have failed over a reasonable period of time (Article 31) – Requires developed countries to provide incentives to their companies to transfer technology to least-developed countries – Controversy over public health & access to medicines © 2010 Cambridge Intellectual Property Ltd. All rights reserved 41
  • 42. UNFCC Provisions (1)• Article 4.1 (c) – All Parties, taking into account their common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances, shall: – “Promote and cooperate in the development, application and diffusion, including transfer, of technologies, practices and processes that control, reduce or prevent anthropogenic emissions of greenhouse gases not controlled by the Montreal Protocol in all relevant sectors, including the energy, transport, industry, forestry and waste management sectors”42
  • 43. UNFCC provisions (2)• Article 4.5 – “The developed countries and other developed countries included in Annex II shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of or access to environmentally sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention.”...• Article 4.7 – “The extent to which developing country Parties will effectively implement their commitments under the Convention will depend on the effective implementation by developed country Parties of their commitments related to financial resources and transfer of technology...”43
  • 44. Stern Review: Chapter 16, page 351 (a)• Information is a public good. Once new information has been created, it is virtually costless to pass on. This means that an individual company may be unable to capture the full economic benefit of its investment in innovation. These knowledge externalities (or spillovers) from technological development will tend to limit innovation.• There are two types of policy response to spillovers. The first is the enforcement of private property rights through patenting and other forms of protection for the innovator. This is likely to be more useful for individual products than for breakthroughs in processes or know-how, or in basic science. The disadvantage of rigid patent protection is that it may slow the process of innovation, by preventing competing firms from building on each others‟ progress. Designing intellectual property systems becomes especially difficult in fields where the research process is cumulative, as in information technology.• Innovation often builds on a number of existing ideas. Strong protection for the innovators of first generation products can easily be counterproductive if it limits access to necessary knowledge or research tools for follow-on innovators, or allows patenting to be used as a strategic barrier to potential competitors. Transaction costs, the equity implications of giving firms monopoly rights (and profits) and further barriers such as regulation may prevent the use of property rights as the sole incentive to innovate. Also much of value may be in tacit knowledge („know-how‟ and „gardeners‟ craft‟) rather than patentable ideas and techniques.44
  • 45. Stern Review: Chapter 16, page 351 (b)• Another broad category of support is direct government funding of innovation, particularly at the level of basic science. This can take many forms, such as funding university research, tax breaks and ensuring a supply of trained scientists.• Significant cross-border spillovers and a globalised market for most technologies offer an incentive for countries to free-ride on others who incur the learning cost and then simply import the technology at a later date9. The basic scientific and technical knowledge created by a public R&D programme in one country can spillover to other countries with the capacity to utilise this progress. While some of the leaning by doing will be captured in local skills and within local firms, this may not be enough to justify the learning costs incurred nationally.• International patent arrangements, such as the Trade Related International Property Rights agreement (TRIPs10), provides some protection, but intellectual property rights can be hard to enforce internationally. Knowledge is cheap to copy if not embodied in human capital, physical capital or networks, so R&D spillovers are potentially large. A country that introduces a deployment support mechanism and successfully reduces the cost of that technology also delivers benefits to other countries. Intellectual property right issues are discussed in more detail in Section 23.4.• International co-operation can also help to address this by supporting formal or informal reciprocity between RD&D programmes. This is explored in Chapter 24.45
  • 46. Stern Review: Chapter 24, page 10• In many cases intellectual property rights are not the key barrier to transfer of technology.• Within international debates on climate change there has been a particular focus on the role of intellectual property rights (IPR) as a barrier to the international diffusion of technologies. In principle, patents that protect IPR and reward the innovator are important as they provide an incentive to invest in developing new products. Weak IPR may deter domestic firms in developing countries from purchasing technologies as their competitors may be able to copy them without paying. Companies with advanced technologies often cite insufficient IPR protection in developing countries as a barrier to technology transfer, and suggest stronger protection, for example by full implementation of the TRIPs agreement, would help them deploy advanced technologies. Increasing the incentives for mitigation (for example by introducing a carbon price) increases the value of patents for low-carbon technologies and acts as a stimulus to investment in innovation in this area. The benefits of having an intellectual property (IP) regime do not imply that such rights should be increased without limit, especially if they reduce the beneficial effects of product market competition.• Patents can also be seen as creating a short-term monopoly and thus limiting efficient diffusion whilst the owner enjoys monopoly rents46
  • 47. Case Study: Licensing Regime Options for commercial client Client Profile A Fortune 500 medical devices company asked us to help identify a transition strategy to help move an industry with a highly proprietary and litigious culture toward a more open cross-licensing approach Business Situation • The client was concerned that R&D resources were invested into inventing around other incumbents, rather than on innovations to meet end- user needs. As a result key market niches remain unexplored, whilst regulatory pressure increased • Key questions posed by our client were: • evidence that the industry is ripe for change? • What are the Pro‟s and con‟s for moving to a cross-licensing approach, based on other industry experience? • What scenarios can be identified, resulting from a move to a cross-licensing regime? • How to initiate change toward a cross-licensing regime? Our Approach Results and Benefits • We analysed patent related activity in the client industry and a comparator industry to reveal innovation trends, providing empirical evidence of the gap in innovativeness and increasing litigation risk in the client‟s space. • A series of interviews with experts and senior executives from the client‟s and comparator industries helped relate the risks and • Our results showed the take-off in innovation rates in the benefits of moving to a cross-licensing approach. comparator industry after the introduction of industry-wide licensing agreements. • We developed a „checklist‟ of indicators for pressures of change, as well as strategic considerations that support a move towards a • We also compared patent citation rates and showed an increasing cross-licensing & standardisation regime. inter-relatedness of technology in the clients space relative to the comparator space: increasing litigation risk in the absence of • We also developed a sequencing strategy aimed at preserving our licensing agreements clients industry leadership and protect traditional revenue sources during transition to the new regime. • Our client is using our outputs to build internal and external stakeholder support for the proposed cross-licensing regime © 2010 CambridgeIP. All rights reserved
  • 48. Our contact details Ilian Iliev Quentin Tannock (CEO and Founder) (Chairman and Founder) ilian.iliev@cambridgeip.com quentin.tannock@cambridgeip.com GSM: +44-077-863-73965 GSM: +44-077-8621-0305 Internet Resources Corporate Office Website: www.cambridgeip.com www.boliven.com Cambridge Intellectual Property Ltd Blog: www.cambridgeip.com/blog 8a King‟s Parade, Cambridge CB2 1SJ, United Kingdom Sign-up for our Free Newsletter UK: +44 (0) 1223 370 098 on our Home Page Fax: +44 (0) 1223 370 040 48 © 2010 CambridgeIP. All rights reserved

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