1 Gordana Dodig-Crnkovic Department of Computer Science and Engineering Mälardalen University 2003 PROFESSIONAL ETHICS IN SCIENCE AND ENGINEERING CD5590 LECTURE 13

2 Intellectual Capital, Intellectual Property and Ethics

3 Intellectual Capital  Conversion of knowledge (a raw material) into something valuable (a product of knowledge) – Term often used interchangeably with Intellectual Assets  Knowledge-based items that company owns or controls that will produce a future stream of benefits for the company

4 Intellectual Capital  Intangible* in nature –Sometimes called “hidden assets” because they are hard to identify and difficult to measure –Brand names, copyrights, patents –Processes, databases, system that give entity a competitive advantage *intangible assets = immateriella tillgångar

5 Intellectual Capital  Data can be transformed into knowledge –Information is data or ideas that have been organized or shaped in meaningful ways  Knowledge can become intellectual capital –Intellectual capital is knowledge that has been acted upon and transformed into something of value to the organization

6 Types of Knowledge  Explicit knowledge –Expressed in language and communicated or shared Scientific formula Codified procedures Universal principles  Tacit knowledge –Insights, hunches*, intuition –Deep-rooted skills that are highly personalized and difficult to communicate to others I have a *hunch that = jag har på känn att, jag har en känsla [av] att

7 Creation of Intellectual Capital  Active, dynamic process that involves continuous feedback and feed-forward among data, information, knowledge and intellectual capital

8 Why is Intellectual Capital Important?  Knowledge is the key factor in the “new economy” –Rapid advancement and adoption of technology –Expansion of global marketplace –Changing character of competition  True value of corporation = human competencies, databases, organizational capabilities, intangibles, ongoing coalition relationships

9 Why is Intellectual Capital Important?  Economic development is more a process of knowledge accumulation than capital accumulation (according to the World Bank)  Service industries dominate and their primary resource is people –*Retailers/wholesalers respond rapidly to customer demands (i.e., provide services) –Even in manufacturing, considerable value is added through research, design, marketing, and customer support *retailer= detaljhandlare; wholesaler = grossist

10 Intellectual Capital Management  The first step toward management of intellectual capital is to visualize it –We need concepts, categories, models and other “knowledge structures” that clarify thinking This is especially true for intangibles!

11 Types of Intellectual Capital  Human capital –Know-how, capabilities, skills and expertise of the human members of the organization  Structural capital or organizational capital –Systems, networks, policies, culture, distributional channels and other organizational capabilities  Relational capital –Connections with people outside the organization, level of backorders, customer loyalty, etc.

12 Taxonomy of Intellectual Capital

13 Knowledge Management  Knowledge management - processes necessary to capture, codify and transfer knowledge across the organization to achieve competitive advantage.

14 Third Millennium: Intellectual Capital Dramatic Growth

15 Conquering the Intellectual Domain in Business and Public Sphere  Second millennium conquered natural resources (material sphere) and made them a commodity  Third millennium is trying to conquer the intellectual sphere and turn intellectual values to commodity –Thoughts as industry –Thoughts as business –Knowledge as commodity, knowledge market

16 The Task for the Third Millennium  The new computerized world is changing paradigm for the domain of knowledge production and inventions - from amorphous (unstructured) thinking to structured (morphological) thinking that makes use of computers even more efficient.

17 Knowledge Management, KM Knowledge Management Epistomology, Ontologies Academic Tradition Management Socio-Economy Technology Hard Soft New Measures IC, GKP*, KVA* New Markets Knowledge Trading New Methods Sensing New Tools Intelligent Agents New Perspectives Knowledge Ethics Cultures / ‘Knowledges’ Story Telling *GKP = Global Knowledge Partnership *KVA Knowledge Value-Added = framework for measuring the value of corporate knowledge assets.

18 Knowledge is fast becoming a primary factor of production. (e.g., Handy, 1989, 1994; Peter, 1993; Drucker, 1992) Source: Theseus International Management Institute, February 2000

19  Systems Theory  Risk Management Assessment  Intelligent Agents  Management of R&D  Decision Support Systems  Modeling and Simulation  Data Mining / Data Warehousing  Enterprise Resource Planning  Business Process Engineering  Systems Analysis  Systems Engineering  Leadership  Ethics Knowledge Management - Multidiscipline  Communications Theory  Organizational Psychology  Visualization  Groupware  Virtual Networks  Strategic Planning  Management-by-Objectives  Total Quality Management  Management Theory  Management of Information Systems  Database Design / Database Management Systems  Data Communications and Networks

20 Knowledge Management Process  Knowledge generation - discover new knowledge  Knowledge codification - capture and organize knowledge so it can be found and reused –define strategic intent –identify & evaluate existing knowledge –consider use  Knowledge transfer - transmitting knowledge from person or group to another and absorbing that knowledge

21 Intellectual Property

22 Ethics about Information  Privacy  Accessibility  Accuracy  Property –Who owns data about people? –Who owns intellectual efforts on web? –Copyrights, watermarks & other protections

23 Normative Theories of Business Ethics  Stockholder theory –Milton Freedman declares that the sole purpose of business is to increase profit.  Stakeholder theory –responsibility to all those who hold a stake in firm –stockholders, customers, employees, suppliers, local community  Social contract theory –consider needs of society (net gain) Microsoft Antitrust Case "The Stakeholder Concept in Biotechnology" *

24 Intellectual Property Rights A broad term covering: Patents (rights in inventions) a drug compound, a phone, maybe software effects Trade marks (rights in image and branding) Nokia, Chanel No.5’s smell, Jacque Villeneuve’s face! Copyright (rights in means of expression – literary and artistic works) Picasso’s Guernica, Microsoft code, Lord of the Rings, Product Manuals Intellectual Property Handbook

25 Less Well Known Rights Confidentiality – information subject to a duty of secrecy Trade secrets - Coke was a trade secret for 106 years [ it is sugar, caramel, caffeine, phosphoric acid, lime juice, and vanilla essence,oils of lemon (120 parts), orange (80), nutmeg (40), cinnamon ( 40), nerol (40) and coriander(20),..] Data Protection – rights of privacy Design Rights – Industrial and artistic designs.

26 Why are These Rights Important? All Intellectual Property Rights give their owner exclusive rights of dealing. Permit exclusion of competitors. Permits entry to a market – entry fee. Can generate income by licensing. Funders like IP strategies, they love patents

27 Essential Elements Copyright – automatic right on original creation, no need to register, enforceable internationally, time limited, no lawyer needed Trade Marks – territorial right, needs registration, covers specific goods and services Body Shop cosmetics v car repair, no time limit, lack of confusion with other marks essential, lawyer needed Patents – territorial right, needs registration, time limited, novel and inventive step essential, lawyer really needed!

28 Copyright This covers a means of expression – works of art, literature, software code, drawings,. It does not cover inventions, only the means of expressing those inventions – if someone copies the effect of an invention by different expression it is not a breach of intellectual property rights.

29 Trade Marks Not often a concern for a new company except as clearance. Is anyone using the name you want? Check the Trade Marks Register, but also use the Internet. Rights may be regional, business is international.

30 Patents Unlike other rights this protects effect not image or expression. A well crafted patent can give monopoly rights to a business in its area. A patent is expensive but there are cheaper preparatory steps and it’s cheaper to get a patent than to fight one!

31 Confidentiality An invention is not patentable if it is made publicly available. It is patentable if the information has not been made public and is being kept confidential. BUT most funders will refuse to sign NDA on principle. *NDA = A non-disclosure agreement is a signed formal agreement in which one party agrees to give a second party confidential information about its business or products and the second party agrees not to share this information with anyone else for a specified period of time.

32 Intellectual Property and 21 st Century University  New emerging modern sciences with very strong bonds to industry: computer science, biotechnology,.... Boundaries between science, research, development and technology often difficult to define.

33 Intellectual Property and 21 st Century University  Universities in the 21st century should be different from what they were in the previous century. They have to produce a number of, globally top-ranked, intellectual property based on advanced basic research activities. Intellectual property thus produced has to be exploited to contribute the development of economy and society. Appropriate reform of universities should be sought, thereby enabling universities to be a place for the invention of basic and fundamental inventions and a source of active venture businesses and new industries with high - tech oriented competitiveness.

34 Intellectual Property and 21 st Century University  In several years, national universities will be changed into corporate entities  Under the current patent law, publication of an article by a researcher may bar his/her patent application thereafter. Various reports including dissertation paper, master paper and doctor paper are not exceptional. In USA, publication by the author is treated exceptional.

35 Intellectual Property and 21 st Century University  Basically university may act for profit and do business of licensing the tangible property, provided that university has to lease or supply it to a requestor on a non-profit basis when and if he/she requests the assignment of the tangible property for research purpose.

36 Intellectual Property and 21 st Century University  In addition to conventional ethical mottos such as “Respect for Life”, “Value of Money” and “Don’t Steal”, “Respect for others’ idea” should be taught at school.  (In this context “respect” means “pay”.)

37 Intellectual Property and 21 st Century University  In the field of e-commerce and environment, technologies to prevent earth warming and environmental degradation should be sought. Likewise, gene and protein in bio-tech field.  In these fields, some arrangement to adjust the interest of intellectual property and competition policy would be needed. Competition authority will be required to sort out the interest of inventor and disadvantage of monopoly caused by patent misuse.

38 The Triple Helix THE TRIPLE HELIX Gene, Organism, and Environment Richard Lewontin Professor at the Museum of Comparative Zoology, Harvard University. Harvard University

39 The Triple Helix The central message of the book is that we will never fully understand living things if we continue to think of genes, organisms, and environments as separate entities. Lewontin shows that an organism is a unique consequence of both genes and environment, of both internal and external features.

40 The University of The Future The transformation of “ivory tower” to enterpreneurial paradigm Increasingly knowledge-based societies. The triple helix model: – ACADEMIC – INDUSTRY – GOVERMENT

41 Societal Aspects of Science As the 21st century begins we must embrace the societal aspects of science as well as the applications of science and the insights science provides for foundational issues. It is necessary to bridge the increasing gap between the sciences and the humanities by promoting rational and analytical discussions of central issues of concern to scientists and other scholars, and to the public at large.

42 Scientific Ethics Scientific Ethical Norms (1) – Communalism requires that scientific knowledge should be public knowledge. – The results of research should be published. – There should be freedom of exchange of scientific information between scientists everywhere. – Scientist should be responsible to the scientific community for the trustworthiness of their published work.

43 Scientific Ethical Norms (2) – Universalism requires that science be independent of race, color, or creed and that it should be essentially international.

44 Scientific Ethical Norms (3) – Disinterestedness requires that the results of bona fide scientific research should not be manipulated to serve considerations such as personal profit, ideology, or expediency. In other words they should be honest and objective which does not mean that research should not be competitive.

45 Scientific Ethical Norms (4) Organized skepticism requires that statements should not be accepted exclusively on the word of authority. Scientists should be free to question. The truth of any statement should finally rest on a comparison with observed fact.