Posts Tagged intellectual property

Science embraced: patent policy merits a brief mention Peter Kerr Mar 07


Another guest blog by IP mentor, Doug Calhoun

The McGuinness Institute is to be congratulated on its exhaustive analysis of science in New Zealand, ‘Report 9: Science Embraced: Government-funded Science Under the Microscope’:

The report will no doubt generate considerable debate.

In focusing just on the very brief patent policy aspects of the report I feel a bit presumptuous – like Spike Milligan when he wrote ‘Hitler: My part in his downfall.’ But it is the patent bit about which I would like to continue the debate.

In my first guest post: I pointed out the inconsistencies between the MED and the MSI approaches to patent and innovation policies. The McGuinness Report concludes (on pages 94 and 95) that these inconsistencies are symptomatic of a wider problem:

‘There is a lack of clarity surrounding the respective roles of MSI and the Ministry of Economic Development (MED) regarding economic development. MED clearly has a role in fostering economic development and prosperity for all New Zealanders, and many of its portfolios are aligned to the six areas of investment determined by MSI: high-value manufacturing and services sector (HVMSS); biological industries; energy and minerals; hazards and infrastructure; environment, and health and society. It is not clear how the two ministries coordinate their strategies in these areas given that the difficulty in distinguishing the stated aims of these two ministries has been noted in the science-policy community.’

The report discusses the role of intellectual property on pages 72 and 73. The teaching that it extracts from the Uniservices Report: is that although there is some evidence that patents act as an incentive to innovation and thereby increase productivity, it did not find evidence that IP on its own is a driver of productivity.

What the McGuiness Report did not really get to is that the primary role of patents is to incentivise investment in the commercialisation of inventions.

A comprehensive study of the importance of patents to US entrepreneurs was the Berkley Patent Survey that is discussed by its authors: here, here and here.

While they urge readers not to leap to too many conclusions, one common theme that comes through is that patents are seen as being more important to the investors in entrepreneurial ventures than to the entrepreneurs themselves.

There is some evidence of this in New Zealand. At the Grow Wellington launch of its Innovating for Health Challenge on 5 March, Robert Feldman, a venture capitalist with Pacific Channel: outlined his company’s expectations of entrepreneurs who are seeking funding. His two highest priorities were the quality of the management and the quality of the IP, with particular emphasis on patents. Dr Feldman then drilled into what he meant by high quality patents. They must be:

1. Focused on the product that they are intended to protect,
2. They must be free of prior art, and
3. The entrepreneur must have freedom to operate.
4. The enterprise should have a track record in New Zealand (Underlining the point I was making in my first post that NZ patents do matter!)

(‘Freedom to operate’ means that you have done a comprehensive search for other patents in markets you intend to enter and have determined there are no patents you are likely to infringe. And, if there are such patents, you have arranged to licence them or made some other accommodation.)

With some technologies, freedom to operate may involve having to navigate your way through a dense patent thicket. How this is being done on a global basis through private collaborative arrangements is described in chapter 3 of the WIPO publication here.

The McGuinness Report (probably without realizing it) did consider one approach to solving the problem:

‘Creating better forms of co-creation based on collaborative practices between institutions, and new initiatives that allow inventions to be put into the public domain more quickly, seem part of the solution. For example, New Zealand could consider becoming a leader in Common Patents [I think that should read a Patent Commons], patents that register the creator and are fully transparent, but allow free use with acknowledgement (along the lines of the approach used by the Creative Commons, but through specific ‘New Zealand Invention Commons’). There are obviously a number of different ways to explore this landscape, but it is clear that such a system, which puts vast numbers of inventions into an open marketplace where entrepreneurs have access to them, can help economic growth, health and well-being. The challenge is therefore to create a system where new knowledge and technological advances are created and then traded in an open marketplace, which recognises the creator but also enables the entrepreneur to bring benefits to society.’

The reference to ‘patents that register the creator and are fully transparent’ is a bit of a mystery. All New Zealand patents do ‘register the creator’ by the requirement to name the inventor(s). And before a patent will be granted it must describe how to put the invention into practice — in terms that would be understood by someone able to put it into practice — so they are ‘transparent’.

Firms who invest in R & D and seek to protect that investment through patents are hardly going to be motivated to give up their exclusivity by donating their patents to a Patents Common when the only reward is an acknowledgement of authorship.

The ‘public domain’ is a part of an ‘accessible domain’ (there is a chapter in the book ‘Driving Innovation’ by Michael Gollin on this). The accessible domain includes a vast Patent Commons of published patents in other countries that are not enforceable in New Zealand and New Zealand patents that are no longer in force because a renewal fee has not been paid. And the accessible domain includes patents that others are prepared to license out a right to exploit. Freedom to operate can be thought of as finding a place in the accessible domain.

The WIPO Report at pages 118 and 119 explores why the open source software business model seemingly exists without patents. Studies it refers to show that:

‘both producers and users of open source products often blend participation in open source and proprietary software. In the case of producers, it is common for firms to develop both proprietary and open source programs. Firms may also participate in open source software projects strategically to upset dominant players.’

It then asks:

‘whether similar practices are transferable to other industries. Indeed, models of the open source type have been applied to other innovative activity. However, their uptake appears less spectacular than for software. One explanation may be that the success of open source software is closely linked to the special circumstances of software development: projects can be broken into small, manageable and independent modules; input by geographically dispersed developers can be easily shared; upfront capital costs are limited; and new products do not face lengthy regulatory approval processes. Nonetheless, additional opportunities for open source types of collaboration may well arise in the future as technology and the nature of innovation evolve.’

The business models that the WIPO Report describes in chapter 3, such as patent pools and markets for the sale and purchase of patents or patent licences, are being used by those seeking to monetise their IP instead of the open source software model.

Both the Uniservices and the McGuinness Report say that a lot more research needs to be done (they would say that wouldn’t they). And that research should begin where the WIPO report leaves off.

The McGuiness Report also mentions the importance of Talent (with a capital ‘T’). At the Grow Wellington launch Elf Eldridge promoted nurturing that talent with a dose of real world interaction through a programme to be run by Chiasma:

The Uniservices Report survey noted the shortage of understanding of the management of IP. The call for nurturing science talent should extend to nurturing IP talent in talented scientists.

~ Doug Calhoun
IP Mentor
Serial Stirrer

Kiwi culture to ‘look under the IT hood’ provides an overseas opportunity Peter Kerr Dec 21

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We’ve got the national initiative and creativity to look under the hood of IT systems, but the country’s missing an opportunity to collectively sell its IT security expertise to the world.

“If we took a pan New Zealand concept of IT security, we could export it and charge accordingly,” says Lateral Security sales director, Ratu Mason.

The kiwi attitude to delve into software and its security’s depths, as well as legislation that while not exactly encouraging such behaviour, also doesn’t forbid it, is an advantage for this country Mason says.

“It is intellectual property that we have, and Google’s willing to pay for it because they realise that we’re good,” he says. Three of Google’s top IT security specialists are New Zealanders.

“We’re creative, and we need to foster and use that to our country’s benefit.”

Mason envisages that New Zealand IT security companies could virtually come together, and target a country by setting up a small branch office of five or six people in the United States, Europe, Canada, Australia or even China.

“This would be a commercial set up, with service offerings that are different from someone else,” he says.

Such an overseas front office would use a New Zealand back-office to test and monitor for IT system vulnerabilities.

Mason says he’s had difficulty convincing government departments of the opportunities for a collective NZ approach to such IT security challenges, but he points out that such opportunities are only going to grow larger.

With more online transactions, there’s more privacy and monitoring of privacy requirements, as well as increased opportunity for fraud to be carried out.

The huge rise in mobile applications will only see these risks grow for companies, and banks in the first instance he says.

“New Zealand’s recognised as world leaders in IT security,” says Mason. “We could be the next Nokia in this field, and we wouldn’t even have to carry out manufacturing. That’s because it is all in your head knowledge.”

He says the opportunity exists for a collective New Zealand approach to offering and serving the IT security field, but that a shared and planned approach to providing such a service could create a vibrant industry and new wealth for the country.

Safe vaccine gun picks up the design equivalent of an Olympic gold medal — (Simcro) Peter Kerr Dec 03

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We, as in NZ Inc, and particularly the companies that get them, are always keen to be internationally recognised.

And when the company involved, Simcro, devotes 10-12% of its annual turnover to R&D, there’s even more reason to celebrate walking the talk when it comes to innovation.

The Hamilton animal health pharmaceutical delivery solutions company (that is, vaccine injectors and drench guns; at least at this stage) has just picked up the design equivalent of an Olympic gold medal.

It has received an International Forum (IF) 2011 product design award from Germany; one of three leading design awards in the world.

Simcro’s Sekurus (in Latin securus means safety), is a self-tenting gun, that virtually eliminates accidental pricking of the operator while also allowing one-handed operation. It and Simcro were reported on earlier in sticK, here, and here.

Managing director and part-owner of the company, Will Rouse, says the IP behind the Sekurus is quite defendable as well.

“It’s clever, and we’ve spent a long time developing its mechanism, so we’re happy to take out patents,” he says.

It’s 13 person product development team has more than 70 products under current development, though in the stop/start, approve and move forward nature of its partnership development programme, “they’re only working on 10-12 at any one time,” Rouse says.

More than 90% of its products are exported to more than 65 countries. Generally these are distributed alongside an animal health company’s product (such as Novartis, Pfizer and Ancare among others), the delivery system part and parcel of the whole.

Rouse would like to see Simcro doubling its product development team within a couple of years as the company looks to expand beyond farm animals and into the more lucrative companion animal as well as human health sectors (which is much more heavily regulated).

Such is the company’s rapid fostering of partnerships with animal health companies, it already has an open invitation to develop products for human health from a major pharmaceutical player.

The company’s most limiting factor is capital for development he says. Given unlimited funds, he’d hire more product development personnel, being confident Simcro’s management culture can execute the company’s strategy.

“From a small place like New Zealand, we’re able to produce inventions at the highest level,” he says. “These days, we’re well aware of what we’re capable of.”

In short, they’re capable of gold medals!

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