Posts Tagged: "incentivizing innovation"

Assuming America wants paradigm-shifting, truly disruptive innovation we need to recognize the need to incentivize the risk-takers and those that provide the capital to those risk-takers who dare to challenge the status quo. This means policies, laws and rules that foster innovative activities from smaller entities who are most likely to innovate. With an eye toward policies, laws, rules and actions that would most benefit innovators, their endeavors more attractive to investors and more feasible to pursue, the U.S. should adopt policies, laws, rules and actions including…

Wouldn’t it be a great world if people innovated for the sake of innovating, spending every waking moment in the pursuit of solutions and inventions that would better mankind? Wouldn’t it be a great world if investors, the top 1% and the richest corporations would invest hundreds of millions of dollars, even multiple billions of dollars, and fund the many years of arduous work from large teams of scientists and engineers necessary to achieve paradigm shifting innovation? In such an idealized world innovation would happen just because— well because it would just happen. But that isn’t a patent strategy, or a national innovation strategy either.

Protecting innovation through patents is the lifeblood of the global pharmaceutical industry. Without patents the world and its expanding population would be deprived of new and, ultimately, affordable life-saving medicines. Nevertheless, the high profitability of pharma companies has prompted an increasingly widespread (and often ill-informed) political debate on patents. This is not just because of mounting health costs but also the lack of access to life-saving medicines in developing countries. But this argument on the alleged high costs caused by patents falls short because most patents for essential medicines on the World Health Organization (WHO) list are expired and are available at generic medicine prices. Even so, patients in countries where they are most needed do not have access to generics. And the reasons for this are multiple, not least inadequate, poorly-funded healthcare systems.

The effects of proposed Rule 11 on the patent system will be like putting an additional bullet to a dying man. As far as patent litigation is concerned, the pending rule is intended to deliver what was missed in the AIA: shifting fees from infringers to patent owners.

Whether one celebrates or decries the PTAB, there can be little doubt that it has worked a profound effect on the value of American patents—and, concomitantly, on incentives to invest in research and development… Compared to their judicial counterparts, PTAB judges are biased in favor of invalidity. Personnel differences also explain a more disturbing phenomenon, mainly, that the Patent and Trademark Office seems to be at war with itself. Frequently, the PTAB invalidates claims based on prior art that examiners considered during initial prosecution. The only explanation for such discordant outcomes is that PTO examiners take a more pro-patent view of validity than the judges who make up the PTAB.

America innovates most when property rights are stable and government gets out of the way so risk takers can dream the impossible and then go accomplish those dreams… The patent system all three branches of our government has created over the last 12 years has increasingly incentivized the stealing of patent rights rather than engaging in an arm length negotiation with innovators who possess patent rights that are supposed to be statutorily presumed valid. This is antithetical to basic, fundamental principles embedded throughout American law, and basic economic principles. Laws are supposed to be certain, stable and understandable. When that occurs externalities and transaction costs are low, which allows for the bargaining of rights to ensue.

An unfounded belief persists that entrepreneurs are the primary innovators. However, in a study of the top 30 innovations of the last 30 years up through 2009, as judged by Wharton professors, shows innovations that most affected society were conceived by company workers, not entrepreneurs, according to Dr. Kaihan Krippendorff, a Wharton alum and self-described study author… So in order to encourage innovation, these characteristics of employee-innovators should be developed early on, according to Krippendorff. Logically, not only would that increase the level of innovation but also ease the task of innovation management.

Typically, the reform debate over the U.S. patent system features smaller players, but America’s largest tech firms also have issues with the patent system, which go way beyond any single company’s ability to sustain success… Leading off the panel’s remarks was Manny Schecter, chief patent counsel for IBM, who noted that innovation is a risk-bearing operation. “The likelihood that you ever make an investment [into research & development] is based on the return you anticipate on getting in that investment,” Schecter said. Any reduction to the anticipated return caused by uncertainty in IP policy discourages R&D investment. Schecter added that one of the ways in which intellectual property promotes innovation is by preventing others from taking innovations which are not their own. “We want to minimize or control uncertainty in the IP space if we want to maintain an IP surplus and promote the viability of the economy,” he said.

We pick up our conversation with me suggesting that there is a problem with claims being found to be abstract when the decision maker has been able to do a complete 102 (novelty) and 103 (obviousness) analysis. We then move on to discuss the meaning of “innovation,” whether innovation leads to patents or patents lead to innovation, and briefly touch on a long-time disagreement about whether patents are property rights. … LEVY: “Uncertainty I agree makes businesses nervous. That’s obvious. But, and again, I’m speaking only for myself here, it seems to me that for many businesses there is a desire to have the benefits of taking the risk without the down side of taking the risk. And one of the downsides here is that the law can change. Patents are not — even if we didn’t change the law patents are no guarantee of anything. Once you get an issued patent that patent could be found invalid. It’s in the law that a patent can be challenged and that I can be found invalid. So no one should think that once I have this patent that’s it, it’s good for all time and I can take on all comers and they’re going to have to pay me regardless. I have heard too many time people thinking that this is some sort of guarantee and any sort of challenge is a violation of their Constitutional rights.”

These government agencies target successful, inventive U.S. firms. They politicize their processes and disregard the exclusivity that rightfully belongs to patent owners. They take away private property from the creators and give it to favored domestic companies like Samsung and Huawei, which apparently lack the smarts to win fair and square in market-based competition or by ingenuity. It’s time that America put an end to these threats, foreign and domestic. Either you believe in property rights and free enterprise or you don’t… In essence, Chinese, South Korean and FTC officials demand the benefits produced by free markets and property rights for free from American innovators in mobile technology, who took all the risk and made investments in research and development.

Individual inventors, not just corporations, should be able to benefit from the fruits of the inventive mind. The limited private right of a patent is a necessary reward to fuel innovation, something recognized in the Constitution and by both President Washington and President Lincoln. Corporations in their quest to eliminate all patent challenges by delegitimizing the entire patent system have created this crisis, all to protect their bottom line and thwart competition. In time, just as the birds in Carson’s book, inventors will be silenced and innovation will suffer.

The consequences of a weakened patent system are increased inequality, a higher competitive bar for market entrants, protection of incumbent monopoly profits, decreased competition, disincentive to invest in innovation by both small entities that have higher costs and large companies that can free ride, declining productivity growth, slower employment and wage growth and economic malaise… With less incentive to invent or invest in innovation, it should be no surprise that in a weak patent regime, productivity growth has declined precipitously and economic growth is substantially reduced.

Near the end of 2016, a new multidisciplinary research center was forming in Europe under the title European IP Institutes Network (EIPIN) Innovation Society. The organization seeks to improve innovation in Europe by connecting innovative research projects with political leaders and stakeholders by providing recommendations on the research in the form of doctoral IP research. The establishment of this new research center in Europe underscores major differences in worldwide IP regimes, especially between the disarming of intellectual property rights in the United States in contrast to growing IP protections in Europe and China.

in hyper growth startups and other companies that rely on knowledge workers, the agenda for these value makers must remain as clear as possible. However, sometimes intellectual property (IP) creators inside companies get bogged down and cannot concentrate on the next breakthrough due to redtape. Bottom line: a corporate policy day of reckoning remains overdue… “I have observed large multinational corporations that did not have extensive policies and processes, and their workers were entrepreneurial and empowered,” says Cary A. Levitt, chief operating officer, Dennemeyer & Co., LLC, a worldwide partner in IP management with both legal and portfolio services. “They were trusted to use their judgment to make decisions. When the business environment became more competitive, the company implemented detailed decision-making processes. Each decision had to be vetted by one or more panels. Bigger the decision, deeper the assessment, longer the timeline.”