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Innovation takes centre stage

Will increasing recognition of the importance of innovation reshape global policies on intellectual property rights and collaboration?

by Richard Johnson

Richard A Johnson, based in Washington, DC, is the chairman of the OECD/Business and Industry Advisory Council (BIAC) intellectual property and innovation taskforce and of the OECD/BIAC biotechnology committee, and vice-chairman of the technology committee. He is the CEO of Global Helix LLC, the research and innovation policy consulting firm, and senior counsel at Arnold & Porter LLP, where he recently retired as senior partner. He also serves on a number of international advisory committees related to research, innovation and emerging technologies for research universities, global foundations and leading innovator companies.

The Organisation for Economic Co-operation and Development (OECD) has become a global focus for efforts to rethink the relationship between innovation and intellectual property rights (IPR), and a key forum in which to discuss how IPR policies should evolve in light of their importance to the research community.

Some NGOs and other international organisations involved in this dialogue question the role of current IPR and market mechanisms in stimulating research and innovation. The OECD increasingly thinks that innovation is the most important factor driving economic growth, and that IPR policies must be carefully adjusted to reflect this if the knowledge-based industries and global markets of the 21st century are to prosper.

World-class innovation does not happen in a vacuum: it requires workable incentives, processes and institutions. The OECD knows this and is trying to bring together the latest thinking about IPR framework conditions, the globalisation of R&D, and the changing nature of complex innovation to create a new IPR framework. The aim? To accelerate research and innovation, ensure that innovators have sufficient incentives to transfer their work to market, and find more efficient and socially beneficial ways to diffuse technology and other knowledge.

The OECD's approach is based on a growing portfolio of IPR analyses and initiatives, many of which will form part of its comprehensive innovation strategy. Some are directly relevant to today's research managers, such as work on assessing how research uses patented inventions, guidelines on licensing genetic inventions, and policies on software innovation and IPR. Others investigate the interface between science and innovation, looking at topics such as access to data from publicly funded research, and the evolution of scientific publishing and digital delivery.

Work also is underway on innovation process issues relating to IPR. These include new approaches to creating value from intellectual assets, the best ways to manage IPR in international technology collaborations, using the development of intellectual assets to benchmark research performance, and new approaches to global patent statistics. At the macro-economic level, where IPR issues intersect with competition policy, the OECD is considering the changing role of IPR in open innovation and global value chains, as well as taking a stand on counterfeiting and digital piracy. It also is promoting the importance of IPR to the world's fastest growing economies as part of the G8's Heiligendamm Process, which is a dialogue between the member states and the key emerging economies intended to generate a consensus on the most important issues affecting the global economy.

Early OECD initiatives on IPR, knowledge and technology markets, and collaborative mechanisms, are already relevant to the day-to-day work of European research managers. For example, the organisation is studying the finance community's increasing interest in IP. Financiers are beginning to see intellectual assets as another good that they can recast as a security or loan collateral, and then buy and sell. Such financial engineering may lower the costs of trading IP and improve the efficiency with which it moves through complex global value chains. Turning IP into exchange instruments and creating IP markets may create new ways to reduce or share risks for researchers, investors and other stakeholders.

The organisation also is looking at emerging intermediary mechanisms that buyers, sellers, traders and investors can use to exchange knowledge, inventions, designs and data. IPR increasingly is becoming a tradable commodity in these IP exchanges, public and private networks, university-industry partnerships, interdisciplinary and cross-sector research consortia and auctions.

The OECD's Working Party on Biotechnology has recognised the increasing role of such markets in innovation. It is considering whether they could help increase transparency, reduce duplication, deliver economies of scale, create network effects, spur new sources of investment and funding, and facilitate collaboration. Later this year a workshop on applying knowledge markets to health innovation will explore what they are and how they are used, the lessons learned, the opportunities and challenges, and the role of public policy. The workshop is likely to be followed by a wider economic and policy analysis of knowledge and technology markets.

The OECD has an interest in the growing use of collaborative mechanisms such as patent pools, new types of consortia (such as those addressing pre-competitive research), and the rapidly proliferating mix of IPR trading companies, informal global networks and knowledge exchanges. Each offers new ways to ensure the rapid diffusion of knowledge, and encourages the development of intellectual assets.

The organisation wants to provide the right context for these collaborative mechanisms by exploring whether and how they enable new types of R&D collaboration, encourage access to research and knowledge, and promote diffusion of technology. It has established a steering group and plans an expert workshop on IPR collaborative mechanisms during 2008, focusing on their potential for research and innovation in the life sciences. It is particularly interested in whether such mechanisms can be applied throughout the innovation cycle, and their capacity to align the interests of disparate institutions.

As the world's leading intergovernmental economics organisation and policy think-tank, the OECD has many agendas. What's interesting for R&D managers is the emerging consensus that innovation - if viewed as a complex system and not a linear process - is the key both to increasing economic growth and to addressing global challenges such as energy and health. Having embraced the importance of innovation, the OECD is now exploring the growing role of intellectual assets for value creation and the opportunities for new market mechanisms fully to realise the beneficial effects of intellectual property rights – and developing policies to reflect this.

Richard Johnson

CEO, Global Helix

richard.johnson@globalhelix.net

Issue 13 Spring 08

Innovation takes centre stage