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 Capart Chairman of ProTon Europe

Regions for economic changeIPR and licensing2 Important trends relevant to the Knowledge Economy 1.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 changeIPR and licensing3 Classical (Closed) Innovation Company A Company B Current Market Research Development Source: Chesbrough

Regions for economic changeIPR and licensing4 Open (collaborative) Innovation Company A Company B Current Market New Market Source: Chesbrough Research Development

Regions for economic changeIPR and licensing5 Contrasting closed and open models Closed innovationOpen 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 changeIPR and licensing6 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 changeIPR and licensing7 Time DEPLOYMENT PERIOD Second years INSTALLATION PERIOD First years INNOVATION INNOVATION Closed Innovation Closed Innovation Linear model Linear model Competition based on exclusive technologies Competition based on exclusive technologies Contract Research with universities & RTOs Contract Research with universities & RTOs Post bubble recession (sometimes depression) FINANCE UNCERTAIN Post bubble recession (sometimes depression) FINANCE UNCERTAIN TURNING POINT A time to act INSTITUTIONAL RECOMPOSITION INNOVATION INNOVATION Open Innovation Open Innovation Interaction in Networks Interaction in Networks Competition based on business models Competition based on business models Collaborative Research with universities & RTOs + Licence Options Collaborative Research with universities & RTOs + Licence Options The Knowledge Economy Cycle Adapted from Perez

Regions for economic changeIPR and licensing8 New role(s) for universities n Long term investment in excellence in scientific disciplines (industry will not do it any more) n Efficient knowledge transfer with industry in a sustainable way (building bridges)= the Responsible Partnering initiative n Enormous need for training of knowledge transfer professionals, both in university and industry n Help develop new business models (support of spin-out creation) n Support entrepreneurship, incubator services, training, education, mostly at regional level.

Regions for economic changeIPR and licensing9 Most of the potential is not visible. Intellectual Property available for licensing Collaborative Research Opportunities Ocean of Knowledge Spin-outs Patents Copyrights Know how Research tools

Regions for economic changeIPR and licensing10 Instruments of knowledge transfer n Wide range of instruments with complementary functions u Patents and utility models u Secrecy agreements u Collaborative research agreements u Licence agreements, etc. n All require professional competence and must be factored in company strategy. Knowledge transfer is becoming as important as marketing in the Knowledge Economy. n Cannot be outsourced, although professional help is useful (but expensive) n There is a large need of training to make the knowledge transfer market more efficient.

Regions for economic changeIPR and licensing11 New role of patents n Patents are enabling disclosures of inventions in exchange of limited exclusivity n Play 2 complementary roles u Classical (linear): Protect investments in development and market share u Open (collaborative): Facilitate exchange, as instruments of trade in the knowledge economy, to create new markets n Their second role is not efficient in Europe u Way too expensive u Difficult to enforce Major market failure for the Knowledge Economy

Regions for economic changeIPR and licensing12 Regional clusters n Natural way to facilitate partnering involving universities, SMEs, larger companies and public support. n Proximity and citizenship encourage communication and build trust n Implies sharing (=transfer) of knowledge, not just of goods and services n Efficient IPR instruments are needed as well to facilitate transfer and protect investments n Same are needed to trade knowledge at larger scale with partners in other regions.

Regions for economic changeIPR and licensing13 Conclusions 1.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: nUniversities, RTOs, SMEs and larger undertakings nTechnology and social sciences nPublic 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: nTraining and education in the use of IPRs nMore efficient instruments, patents in particular.