The patent-system has evolved rapidly during the past two decades both due to intentional adjustments (patent reform38
Modern analysis of the patent system has tended to focus on the “invention motivation” theory or how patents induce the generation of new knowledge. One concern is that patent protection is becoming easier to obtain and that this may contribute to the erection of barriers to innovation for example in the form of patent-thickets. Far from inducing invention, such scenarios point to the possibility that patent-protection may form barriers to entry for involved markets. The focus on strong patent protection has entered the public discourse, resulting in what Peritz (2008) calls an
“incentive conundrum”. This conundrum involves conflating the public benefit with the interests of private organizations to expand patent protection in a way that confuses public debate and gives policymakers ‘rhetorical cover’ for advocating stronger patent protection.
) as well as to other factors (technological and commercial) affecting the way it is used. This ongoing process of change raises the question of how imperfect the institutional incentive associated with it is and how reforms may help to reform it. There are widespread indications that the imperfection of this particular component of the incentive system may go against its expressed aim to promote the formation of technological knowledge. (e.g. Jaffe and Lerner, 2004; Landes & Posner, 2004; Merges & Nelson, 2006; Meurer and Bessen, 2008).
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In recent years however more attention has turned to the role of patents and patent-based arrangements to facilitate collaborative multi-invention scenarios. There remains a need to better understand the productive potential of intellectual property rights (Andersen & Konzelmann, 2008).
This discussion should take into consideration the role of the patent system as part of a larger institutional setup that shapes how the innovation system addresses the perennial ‘knowledge problem’. In this context, Granstrand (2006) indicates that IPRs may play a useful role in the governance of and in innovation systems at different levels. Here, there is an evident need to distinguish between cases involving single inventions/single inventor-organizations from cases involving multiple inventions and/or multiple organizations. The importance of patents, and the way they are used, will be different, as the discussion indicates.
This report has reviewed the nature and the role of the patent system in promoting the formation of technological knowledge in the economy. This survey indicates that in the current environment of
38 Policymakers are currently reviewing the form and function of the patent-system (cf. the Patent Reform hearings in the US, December 2008) See also a reform process in Germany as well as ongoing discussion of reform at the European Patent Office.
39 Peritz, 2008: “Simply put, the misunderstanding is that the public benefits whenever inventors and their firms benefit from patents. But inventors can be better off, firms more profitable, but society worse off when, for example, the resources applied to invention could have been put to a better use. I call this gap between public benefit and private value, patent’s incentive conundrum. The incentive conundrum confuses or provides rhetorical cover for too many policy makers.” (Peritz, 2008: 8)
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patent reform the coordinative function is reemerging, particularly during the past decade. In a brief look at the expansive patent literature, the review has particularly traced the rise and fall emphasis on the coordination function of the patent system. Another characteristic of recent inquiry is its interest in how patents affect decisions at lower levels of aggregation. This includes the need to better understand two aspects of patent-protection: (i.) how the possibility of patent protection shapes ‘decision architectures’ in the strategies of firms and (ii.) how the existence of patent affects future innovation by other organizations. One implication is that it the relevant level at which to understand the patent system might not be at the level of individual patent but at the level of bundled knowledge, a portion of which may or may not be patented. In this sense, one should also focus on the effect of agreements other arrangements (e.g. patent pools) to improve the climate for collaborative innovation.
In light of the local nature of knowledge, uncertainty underlies both the generation of new knowledge and its transfer and/or co-development. The report focuses especially on the modes of collaborative innovation to the extent that it is discussed in the literature. The premise is that innovation has long involved collaboration but that the nature and the extent of that technology-based collaboration has changed significantly in recent decades. This development has implications for the coordinative role of patents. The report ahs particularly focused on four types of relational links between organizations that involve some form of knowledge creation and exchange. The categories, based on Britto (2004), have implications for the way patents get used to promote knowledge exchanges in these industrial networks. In terms of future work, the report sketches some empirical strategies to study the use of patents in these networks.
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Chapter 2:
IPRs and Norwegian enterprises:
diversification of innovative efforts in Norwegian firms
This chapter follows up on the theoretical inquiry of the relationship between patent use in particular and knowledge formation. It is the first of three predominantly empirical chapters that focus on IPR-usage in terms of firm-demographics in Norway. The point of departure is the a principle of Marshall (1922)—that “the tendency to variation is a chief cause of progress”. In this light it investigates the role of heterogeneity of innovative activities in the Norwegian economy. It introduces the firm linked domestic IPR data that is used in the first three empirical chapters. The prevailing concern with large manufacturing firms with formal R&D activities that is identified in the literature reviewed above is expanded to look at IPR use among all firms in the economy. In addition, essay 2 takes into consideration trademark-registrations, whose economic role has been shown to play an increasingly important role especially in the service-sector. The chapter also serves to introduce the concern about the role of small and medium-sized enterprises as a source of invention which will be followed up in the next two chapters.
Theme Questions
Essay 1: Knowledge formation and patenting What role does the patent system play in knowledge accumulation?
Essay 2: The diversification and
specialization of IPR use in a small open economy
How does use of the IPR system reflect the innovative processes of different agents? What role is played by small firms in specialization and diversification of innovative activity?
Essay 3: The growing use of patents among small firms: areas of growth and challenges
If SME patenting is increasing (see last essay), what technological areas and market dimensions? Do they face greater challenges than larger firms?
Essay 4: Small firm patenting and the transition to European Patent Office
How do Norwegian SMEs use the European Patent System?
How the effects of this transition be measured?
Essay 5: Academic patenting and the transition to an institution-based patenting regime
To what degree do academic researchers already patent and will the introduction in Norway of Bayh-Dole-like legislation improve conditions for academic patenting?
Essay 6: The impact of patenting on research collaboration
Does patenting increase the probability for research collaboration? What role do other factors play?
Publication information : Iversen, EJ (2008) IPRs and Norwegian enterprises: diversification of innovative efforts in Norwegian firms, in Carayannis, EG , Kaloudis A, Mariussen A (eds). Diversity in the Knowledge Economy and Society:
Heterogeneity, Innovation and Entrepreneurship. May 2008. 384 pp. Edward Elgar: Cheltenham UK.
Acknolwedgements: The helpful comments of two reviewers on an earlier draft are gratefully acknowledged.