Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Intellectual property and the diversity of innovation : a repeated question and a recurrent challenge Pr. Dominique Foray Global Symposium of IP Authorities WIPO, Geneva 17 & 18 September, 2009

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Innovation has diversified and proliferated Patents are doing good in some sectors but they are also doing harm in others Should we think of a system to be more « technology-specific »?

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Should we open the Pandora box? Toward optimal design (Brian Kahin) ? –Discrete versus complex products –Cost of invention & commercialisation –Pace of innovation/cumulativeness –Public good characteristics –Network characteristics –Transaction costs In a perfect world the patent system might well be tailored to give optimal incentives to each different industry

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Arguments against industry-specific patent legislation (Jaffe & Lerner, Burk & Lemley) Drafters of patent application will always be more ingenious than the writers of patent rules High risk of policy capture by industry lobbyists seeking special treatments

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Making the unitary patent system work for widely divergent industries Despite the appearance of uniformity, patent law is actually as varied as industries There is enough flexibility in the system/ the locus to lever this flexibility are both the office and the court Policy levers are general rules which require (or at least permit) systematic variation in patent rules by industry (Burk & Lemley)

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Existing policy levers –Abstract ideas –Utility –Secondary consideration on non obviousness or inventive step –Experimental use –The level of skill in the art –Written description –More… Need for new ones –Reverse engineering

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Examples Exclusion of abstract ideas from patentability Use of utility (industrial application) doctrine New doctrine: fortified right to experimental use New type of patentability inquiry

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Challenges : Using policy levers properly From poor practices to effective use: policy levers need to be properly understood as legal principles that can be applied with sensitivity to the industry and factual context of the cases Courts and offices need to understand deeply conditions, procedures and the economic logic of innovation in each industry AND the potential effect of actioning one lever in the specific case Where should economic insight be built into the system (Hunt & Kahin) ? Problem of capacities and incentives for courts and offices. There are a lot of reasons pushing them to wash their hands of involvements in policy calibration and fine tuning. A case for Offices in less developed countries (middle and low income) to build knowledge about the economics of innovation in developing economies

Collège du Management de la Technologie – CDM Chaire en Economie et Management de l'Innovation – CEMI Thank you! References –Burk & Lemley, Policy Levers in Patent Law, 2003 –Kahin, Patents and Diversity in Innovation, 2006 –Hunt & Kahin, Reexamining the Patent System, 2008 –Jaffe & Lerner, Innovation and its discontent, 2004 –Foray, The economics of knowledge, 2006