Bringing Knowledge to the Market:IPR, Licensing and Collaborative Research

Regions for economic change : innovating through EU regional policy

Brussels – 12/13 June 2006

Gilles CapartChairman of ProTon Europe

Regions for economic change

IPR and licensing 2

Important trends relevant to the Knowledge Economy1. Industry is moving to “Open Innovation”

2. Increased involvement of public research in the innovation process in Europe

3. Development of collaborative research and strategic alliances

4. Development of regional clusters as a way to involve SMEs

Regions for economic change

IPR and licensing 3

Classical (Closed) Innovation

Company A

Company B

Current Market

Current Market

Research Development

Source: Chesbrough

Regions for economic change

IPR and licensing 4

Open (collaborative) Innovation

Company A

Company B

Current Market

Current Market

New Market

New Market

New Market

Source: Chesbrough

Research Development

Regions for economic change

IPR and licensing 5

Contrasting closed and open models

Closed innovation Open innovation

Adapted from Chesbrough

The smart people in our field work for us

Not all smart people work for us. We need to work with smart people inside and outside the company

To profit from R&D, we must discover it, develop it and ship it ourselves

External R&D can create significant value. Internal R&D is needed to claim some portion of that value

The company that gets innovation to market first will win

Building a better business model is more important than getting to market first

If we create the most and the best ideas in the industry, we will win.

If we make the best use of internal and external ideas, we will win.

We should control our IP, so that our competitors cannot profit from it.

We should profit from other’s use of our IP (license out) and we should license in other’s IP whenever it advances our business model.

We will own all results from contract research with universities

We will partner with universities to create knowledge and encourage use outside our field

Regions for economic change

IPR and licensing 6

The world of innovation has changed 2 driving forces:

Low cost of accessing vast knowledge Multi-technology nature of new products» Economies of scale in R&D have disappeared

New model of innovation (Open Innovation) Networking, collaborative research Business model has become more important than

technology edge (opportunity for SMEs) Revisiting the use and function of IPR to facilitate

exchange rather than protecting market shares

A change of mindset is required to benefit from Knowledge Economy

Regions for economic change

IPR and licensing 7Time

DEPLOYMENT PERIODDEPLOYMENT PERIOD

Second 20-30 years

INSTALLATION PERIODINSTALLATION PERIOD

First 20-30 years

INNOVATIONINNOVATION

• Closed InnovationClosed Innovation

• Linear modelLinear model

• Competition based on Competition based on exclusive technologiesexclusive technologies

• Contract Research with Contract Research with universities & RTOsuniversities & RTOs

Post bubblerecession

(sometimes depression)

FINANCEUNCERTAIN

Post bubblerecession

(sometimes depression)

FINANCEUNCERTAIN

TURNING TURNING POINTPOINT

A time to act A time to act

INSTITUTIONAL RECOMPOSITIONINSTITUTIONAL

RECOMPOSITION

1971

2000

INNOVATIONINNOVATION

• Open InnovationOpen Innovation

• Interaction in NetworksInteraction in Networks

• Competition based on Competition based on business modelsbusiness models

• Collaborative Research Collaborative Research with universities & RTOs with universities & RTOs + Licence Options+ Licence Options

The Knowledge Economy Cycle

Adapted from Perez

Regions for economic change

IPR and licensing 8

New role(s) for universities Long term investment in excellence in scientific

disciplines (industry will not do it any more) Efficient knowledge transfer with industry in a

sustainable way (building bridges)= the Responsible Partnering initiative

Enormous need for training of knowledge transfer professionals, both in university and industry

Help develop new business models (support of spin-out creation)

Support entrepreneurship, incubator services, training, education, mostly at regional level.

Regions for economic change

IPR and licensing 9

Most of the potential is not visible.

IntellectualProperty available

for licensing

CollaborativeResearch

Opportunities

Ocean of KnowledgeSpin-outs

PatentsCopyrights

Know howResearch tools

Regions for economic change

IPR and licensing 10

Instruments of knowledge transfer Wide range of instruments with complementary functions

Patents and utility models Secrecy agreements Collaborative research agreements Licence agreements, etc.

All require professional competence and must be factored in company strategy. Knowledge transfer is becoming as important as marketing in the Knowledge Economy.

Cannot be outsourced, although professional help is useful (but expensive)

There is a large need of training to make the knowledge transfer market more efficient.

Regions for economic change

IPR and licensing 11

New role of patents Patents are enabling disclosures of inventions

in exchange of limited exclusivity Play 2 complementary roles

Classical (linear): Protect investments in development and market share

Open (collaborative): Facilitate exchange, as instruments of trade in the knowledge economy, to create new markets

Their second role is not efficient in Europe Way too expensive Difficult to enforce

Major market failure for the Knowledge Economy

Regions for economic change

IPR and licensing 12

Regional clusters Natural way to facilitate partnering involving

universities, SMEs, larger companies and public support.

Proximity and citizenship encourage communication and build trust

Implies sharing (=transfer) of knowledge, not just of goods and services

Efficient IPR instruments are needed as well to facilitate transfer and protect investments

Same are needed to trade knowledge at larger scale with partners in other regions.

Regions for economic change

IPR and licensing 13

Conclusions1. The knowledge economy is leading to products and

services combining many technologies to serve higher level needs, including public needs.

2. We can compete if we succeed in partnering between: Universities, RTOs, SMEs and larger undertakings Technology and social sciences Public and private organisations

3. A change of mindset is needed from all stakeholders. This is easier to achieve at regional level.

4. The knowledge market must become efficient as well: Training and education in the use of IPRs More efficient instruments, patents in particular.