Intellectual property and innovation protection : new practices and new policy issues

162 Pages·2017·2.431 MB·English

by  Lallement, Rémi

Intellectual Property and Innovation Protection
Innovation between Risk and Reward Set
coordinated by
Bernard Guilhon and Sandra Montchaud
Volume 3
Intellectual Property and

Innovation Protection

New Practices and New Policy Issues

Rémi Lallement
First published 2017 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as
permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced,
stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers,
or in the case of reprographic reproduction in accordance with the terms and licenses issued by the
CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the
undermentioned address:
ISTE Ltd John Wiley & Sons, Inc.
27-37 St George’s Road 111 River Street
London SW19 4EU Hoboken, NJ 07030
UK USA
www.iste.co.uk www.wiley.com

© ISTE Ltd 2017
The rights of Rémi Lallement to be identified as the author of this work have been asserted by him in
accordance with the Copyright, Designs and Patents Act 1988.
Library of Congress Control Number: 2017950130

British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library
ISBN 978-1-78630-070-6
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Chapter 1. The Rationale of the System and the Diversity
of the Forms of Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Going back to the origins and goals of intellectual property law . . . . 1
1.1.1. Some historical points of reference . . . . . . . . . . . . . . . . . . . 1
1.1.2. Some market failures that must be addressed . . . . . . . . . . . . . 3
1.2. The formal tools of intellectual property law . . . . . . . . . . . . . . . . 5
1.2.1. Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.2.2. Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.2.3. Industrial design right . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.2.4. Other technological creations (utility patents, plant
variety rights, etc.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.2.5. Copyright and neighboring rights . . . . . . . . . . . . . . . . . . . . 9
1.3. Informal means of protection . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.3.1. Trade secrets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.3.2. Lead time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.3.3. The control of complementary assets . . . . . . . . . . . . . . . . . . 11
1.3.4. Design complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Chapter 2. How Companies Choose these Tools . . . . . . . . . . . . . 13
2.1. The factors behind the choice to use these different tools . . . . . . . . . 15
2.1.1. Differences according to the country considered . . . . . . . . . . . 15
2.1.2. Differences according to the size of the company . . . . . . . . . . . 16
vi Intellectual Property and Innovation Protection
2.1.3. Differences according to the stage in the innovation process . . . . 17
2.1.4. Differences according to the type of innovation
(process or product) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.5. Another key factor: the types of market or
technology considered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1.6. Marked preferences in relation to the sectors as well . . . . . . . . . 20
2.2. The microeconomic effectiveness of protection . . . . . . . . . . . . . . 22
2.2.1. Which contribution is made to performances in terms
of innovation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.2.2. Which links are there between patents
and R&D profitability? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.2.3. What is the value of patents? Between cost-benefit
calculations and lottery logic . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Chapter 3. How Effective is the System in Terms of Social Welfare?
The Dimensions of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.1. Intellectual property rights as a second-best solution . . . . . . . . . . . 29
3.1.1. A blend of dynamic efficiency and static inefficiency . . . . . . . . 30
3.1.2. A right to try to exclude rather than a
guarantee of monopoly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.2. Looking for an effective patent . . . . . . . . . . . . . . . . . . . . . . . . 31
3.2.1. Which is the optimal term for patents and copyright? . . . . . . . . 32
3.2.2. Which is the optimal breadth of patents? . . . . . . . . . . . . . . . . 32
3.2.3. Which is the optimal height for patents? The issue
of the patentability criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.3. Several possibilities to best configure rights according
to the general interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.3.1. Patents: a disclosure requirement that favors
the diffusion of knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.3.2. The role of filter played by courts and by
opposition and reexamination proceedings . . . . . . . . . . . . . . . . . . . 36
3.3.3. Licensing and the interaction with competition policy . . . . . . . . 37
3.3.4. The regime of exceptions: the case of research
exemption and fair use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.3.5. The cost involved in obtaining and
maintaining patent rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Chapter 4. How Companies Use Intellectual Property . . . . . . . . . 45
4.1. Defensive strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Contents vii
4.2. Licensing strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.3. Cooperative strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.3.1. Intellectual property, between currency and
a form of sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.3.2. Patents as signaling tools, especially in relation to finance . . . . . 54
4.4. Movement strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Chapter 5. What is the Contribution Made to
Emerging Forms of Innovation? . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.1. The challenges of the digital world and the new forms
of innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.1.1. The issues related to open-innovation practices . . . . . . . . . . . . 62
5.1.2. The requirements of innovation through reutilization
and collective networked innovation . . . . . . . . . . . . . . . . . . . . . . 63
5.1.3. The digital revolution and the growing role of
user-driven innovation and Big Data . . . . . . . . . . . . . . . . . . . . . . 63
5.1.4. Risks of mass counterfeiting linked to the
development of 3D printing . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
5.2. The risk of adverse effects in the recent
development of the patent system . . . . . . . . . . . . . . . . . . . . . . . . . 66
5.2.1. Is an increasing number of patents stifling
innovation in some sectors? . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.2.2. Problems encountered mostly by sectors based
on incremental innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5.3. Two emblematic cases of considerable tension:
biotechnologies and the software industry . . . . . . . . . . . . . . . . . . . . 70
5.3.1. Biotech: what kind of access to genetic
resources and research tools? . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.3.2. The software industry: what kind of
balance between copyright and patents? . . . . . . . . . . . . . . . . . . . . 73
5.3.3. What is the role of open-source software? . . . . . . . . . . . . . . . 76
Chapter 6. The Main Trends of Intellectual
Property Regimes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6.1. A reinforcement trend deriving mostly from America . . . . . . . . . . . 81
6.2. A trend which is also present in Europe and Japan . . . . . . . . . . . . . 83
viii Intellectual Property and Innovation Protection
6.3. Which multilateral framework should we consider, especially
in relation to the needs of developing countries? . . . . . . . . . . . . . . . . 85
6.4. A reinforced copyright regime as well . . . . . . . . . . . . . . . . . . . . 88
Chapter 7. A System that is the Victim of its own
Success or an Anomaly that should be Remedied? . . . . . . . . . . . 91
7.1. The escalation of trademarks, industrial design rights, copyright,
counterfeiting and piracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
7.2. A multiplication of patents of mixed quality and
occasionally with vague outlines . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.3. Increased pressure on the judicial system . . . . . . . . . . . . . . . . . . 98
7.3.1. Patent-related disputes: frequency and costs that
vary according to the sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
7.3.2. The emergence of patent trolls . . . . . . . . . . . . . . . . . . . . . . 101
7.4. A new reform movement from the United States: the backlash? . . . . 106
7.4.1. Correcting the scope of patentability . . . . . . . . . . . . . . . . . . 107
7.4.2. Restoring the patent examination procedure and
introducing a filter on copyright . . . . . . . . . . . . . . . . . . . . . . . . . 109
7.4.3. Avoiding some excesses linked to disputes or
blocking positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Chapter 8. Overall Assessment and Conclusion . . . . . . . . . . . . . . 113
8.1. A possible lever for the countries’ economic growth
through the incentive to innovate . . . . . . . . . . . . . . . . . . . . . . . . . . 114
8.1.1. Some historical lessons . . . . . . . . . . . . . . . . . . . . . . . . . . 114
8.1.2. A diagnosis that remains contrasted and not
sufficiently substantiated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
8.2. A key factor for technology transfer and the
dissemination of knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
8.2.1. Promoting technology transfer through
transnational companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
8.2.2. A key tool for the regulation of knowledge flows . . . . . . . . . . . 121
8.2.3. A key tool for the commercialisation of public
research results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
8.3. A joint evolution on a sectorial level as well . . . . . . . . . . . . . . . . 124
8.3.1. The case of semiconductors and software . . . . . . . . . . . . . . . 125
8.3.2. Examples of past and present disruptive technologies . . . . . . . . 127
8.4. Status quo, reform or abolition? . . . . . . . . . . . . . . . . . . . . . . . . 129
8.4.1. A net benefit or a net cost for the economy and
society as a whole? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Contents ix
8.4.2. Reforming rather than abolishing . . . . . . . . . . . . . . . . . . . . 134
8.4.3. The relation between innovation and the
strength of rights: an inverted U-shape? . . . . . . . . . . . . . . . . . . . . 134
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Introduction
“Therefore, we need to move beyond the simple idea of closure
that excludes opening, the simple idea of opening that excludes
closure […] like in the idea of frontiers, as a frontier is both what
allows and prevents passage, what closes and what opens” (Edgar
Morin, La Méthode – Tome 1: La nature de la Nature, Le Seuil, Paris,
1977).
Intellectual property has clearly become a key factor for innovation
processes in the complex chain, starting with the creation of new ideas
and ending with the launch on the market of the goods or services that
may derive from them. It plays a primary role in the promotion or
channeling of innovation in every decentralized market economy
where public authorities are not necessarily in the best position to
orient innovation efforts towards socio-economic needs. The legal
framework and the relevant institutions play an increasingly
significant role as a regulation instrument, supplementing the market
mechanisms.
Moreover, evidence suggests that in recent times owning and using
intellectual property is playing a more significant part in the strategies
of innovative companies and, similarly, issues of intellectual property
have come to the fore of the political agenda concerning innovation
policies [WIP 11].
However, the crucial role of intellectual property is ambiguous and
often very controversial. Intellectual property is not a simple indicator
of innovation capacity. In this field, more does not necessarily mean
xii Intellectual Property and Innovation Protection
better. The relevant rights make it possible to regulate access to
knowledge and its potential use by establishing the conditions for the
right-holder to either accept to let a third party exploit the protected
subject matter or not. It is in this sense that intellectual property rights
essentially constitute a monopoly and exclusive rights: they confer to
their respective holders the right to authorize as well as forbid. In this
respect, intellectual property law departs from the principle of
freedom of trade and industry and is often at the center of heated
debates on a philosophical and practical level. This is why the basic
issue that involves finding out how and to what extent intellectual
property rights boost innovation is anything but easy.
This work aims to provide interpretation keys that make it possible
to understand these debates by analyzing the different ways in which
intellectual property rights interact with innovation activity. It deals
with this subject mainly from an economic standpoint, but it also refers
to its legal, technological and management dimensions. It is meant both
for an academic audience (students, teachers, researchers) and for
people working in the field and interested in the issues of intellectual
property in their institution or organization, be it a company or any
other kind of body (technology transfer organizations, etc.).
This work is structured as follows. The first three chapters deal
with classic questions of intellectual property in relation to innovation.
After taking a brief look at the historical creation of intellectual
property rights, the first chapter begins by reconsidering the issue of
their goals. Insofar as the digital revolution is often highlighted to
justify a need for aggiornamento, it is undoubtedly useful to
reconsider the origins and principles underlined to justify the
establishment of these rights, mostly during other revolutions, namely
the industrial revolutions in the 19th Century. Besides, the analysis
recalls that other mechanisms can be conceived to promote the
production of the knowledge necessary for innovation, especially in
the field of research and development (R&D). The general
presentation of intellectual property rights allows us to highlight the
fact that they are not limited to the best-known formal legal tools,
namely patents. Taking into consideration other tools such as
copyright, trademark law and industrial design right is all the more
important as innovation cannot be reduced to R&D activities, and it