Companies gain by sharing intellectual property, finds survey
European companies increasingly believe that collaborating with third parties in research and development (R&D) will help them better maximise the value of their intellectual property (IP). They also think that policymakers can do a lot more to safeguard and leverage Europe's knowledge and ideas. These are just some of the conclusions of a report from the Economist Intelligence Unit (EUI). The report involves a survey of 405 senior executives from European countries, as well as a series of in-depth interviews with several executives who are directly responsible for their companies' IP management, and experts in the field. In the past, companies tended to invest in in-house R&D and ring fence their ideas and technologies, believing it to be the best way to protect and benefit economically from their IP. However, in today's information-rich environment, many believe this approach to IP protection and business to be obsolete, favouring instead a more open approach to innovation, where ideas flow in and out of companies. In the survey, the majority of those interviewed support the idea of a more open IP strategy. A total of 68% believe that by increasing collaboration with third parties on R&D, they will increase their innovation output. Meanwhile some 46% say that it made business sense to share inventions with 'open-source' communities, while 28% support the idea of sharing inventions through cross-licensing in 'patent pools' with third parties. Since most collaborative R&D arrangements are fuelled by licensing agreements, 51% of respondent say they expect to increase the amount they earn from licensing over the next two years, with the majority predicting a 6 to 10% increase in earnings. A total of 41% of those interviewed also believe that contracting out R&D to third parties in return for royalties will help them to accelerate the speed to market of new products. 'More companies are seeking to attract ideas from outside or to contract out R&D,' says Christopher Pike, a UK-based patent attorney and author on IP strategy. 'In the past, they might have said: 'We own everything and we'll jump on anybody that tries to get close to us. 'Now they're more likely to say: 'Certain things we'll own, other things we'll license out, cross-licence or licence in. In each case, IP is the currency of the relationship.' Mr Pike refers to the company Procter & Gamble and its Connect + Develop programme, under which the company has pledged to source half of all its innovations from external sources, and to offer its patents up for licensing to external organisations if they remain unused after three years of being granted. But an 'open' approach to innovation does not mean ignoring the need to better protect intellectual property. According to the majority of survey respondents, policy makers could do more to increase the harmonisation of patent policy across the European Union. A European Community Patent, which would allow individuals and companies to obtain a unitary patent throughout the EU, is seen by many as the best way to ensure that European companies' IP is protected and leveraged. The European Commission has sought several times to introduce a Community Patent, but this has so far been blocked by the Council, the main hurdle being the language in which a patent can be filed. Other areas that interviewees wish to see addressed include, among others, harmonising patent approval criteria and the cost of patent infringement litigation, both of which differ from country to country; ensuring compliance with international intellectual property rights (IPR) treaties; developing legislation that would improve IP protection of individual patents in patent pools; and setting enforceable guidelines for companies' licensing agreements.