Technopolis Group

In recent years, the pressure on research and innovation policy to deliver results that tangibly improve economic welfare and help solve societal challenges has increased considerably. Policy makers increasingly understand innovation policy success as the result of a complex interplay of traditional institutions and measures of research policy and other subjects, that until recently, received only marginal attention and were often termed ‘framework conditions’. Two such subjects that have increasingly become important are Intellectual Property Rights (IPR) and standards. Neither is adequately integrated into innovation policy because the communities of IP (and standards) professionals and researchers more or less inhabit different worlds. There is a need to build a bridge.

The growing significance of IP and standards

The last two to three decades have been termed the ‘pro-patent’ era. While there is still a continuing discussion about whether the IP system truly fosters, or actually, impedes innovation, there is no doubt that businesses and policymakers alike have to take IP into account when innovating. But even if this is accepted as fact, the extent to which IP has been increasing in significance may be surprising to many:

Intellectual Property is one way to foster innovation through law and regulation. The Volkswagen ‘Dieselgate’ scandal has brought the use of regulation to support (and to require) innovation to the attention of the general public. Many other regulations such as the paediatric regulation, which seeks to boost treatment options for sick children, have both innovation and well-being goals, too.

Standards provide means through which regulations can be implemented. As with IP, standards have gained considerably in importance. The body of official standards in Germany, for example, has increased from around 5,000 in the 1950s to 33,884 in 2016.

Innovation policymakers and IP

Innovation policymakers struggle to keep up with developments and the growing complexity of the IP and standards system. As for IP, the discussion has traditionally centred on topics such as the role of patents in technology transfer from academia to industry or on the use of patenting as a proxy for innovation performance. Poor policy understanding of IP concepts has led to inadequate design of government interventions. A case in point is over-reliance on counting patents, based on the misleading assumption that more patents are better than fewer patents. The wider scope of IP – encompassing instruments like trade secrets, copyrights, trademarks, designs, issues of IP management – has at best been considered only in shallow ways.

One factor explaining this situation is the existence of ‘parallel universes’, in the sense of disconnection between innovation policymakers/researchers and the IP community. With its traditional focus on legal issues (patent attorneys, legal academics, IP lawyers) and procedural aspects (patent offices), the IP community has difficulty in reaching out to innovation policymakers.

The consequence is that important developments in the IP (and standards) world are not reflected in innovation policymaking. For example, a weak understanding of the working principles of IP instruments may translate into bad performance metrics. An example in the early 2010s was that the Czech Republic’s system of performance-based research funding inter alia provided performance points to universities and institutes for filing Utility Models. These points drove some of universities’ and institutes’ institutional funding. Given that Utility Models are unexamined documents deposited at the national patent office, this led to an undue proliferation of filings, and to a system (since reformed) where research funding could be obtained, basically, by printing paper. The same system also provided points for patent applications – leading to increased filings of essentially useless patents1.

In general, international innovation system reviews such as those of the OECD barely discuss the consequences of new developments in IP like the upcoming Unitary Patent, its new cost structure and enforcement options and how this could affect the various actors in an innovation system. The example of Apple vs. the University of Wisconsin could lead to a discussion about the extent to which European universities can and should enforce their patent rights. Yet such a discussion is barely evident. Many more examples can be given. In effect, innovation policy neglects IP issues that are especially important for the market/commercialisation phases of innovations.

What can be done

Clearly, innovation policy should take much greater account of IP, standards and regulation. Important institutions in the innovation systems like funding agencies, ministries, research organisations need to be trained at the executive level in more depth about the IP and standards system. Teaching of IP should be better integrated into the curricula of higher education institutes and taught from a business (rather than a purely legal) perspective. Innovation policy researchers need to take more account of IP issues in their analyses and policy reviews. This necessitates stronger links between the professional IP community and the actors of the innovation system. After all, it is also in the IP professionals’ interest to have IP properly understood to avoid misperceptions that may hamper their work.

1 – Barbara Good, Niki Vermeulen, Brigitte Tiefenthaler, Erik Arnold, Counting quality? The Czech performance-based research funding system, Research Evaluation: 24(2), 2015

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