Public sector research - shaping factors - IPR regimes

 

 

What are IPR regimes?

Intellectual Property Rights (IPR) are legal titles which give their owner specific exclusive rights on some intellectual product. Major types of IPR are the following:

  • Patents: protect inventions, normally of technological nature
  • Copyright: protect the expression of thought, such as text, or artistic contents, or software
  • Trademarks: protect some distinctive feature of a product (name, logo etc.)
  • Industrial designs: protect the ornamental or aesthetic aspect of an article.

 

IPR is first defined as a right to exclude others from using the protected piece of information without the consent of the owner. The conditions of grant and the specific rights and obligations vary according to the type of IPR. This page concentrates on patents, which are the major IPR associated with innovation.

 

The economic raison d’être of patents is to incentivise inventive activities. The patent system relies upon inventors being responsive to the supplementary revenue permitted by their monopoly power if the invention is successful on the market. Patents are granted as a quid pro quo for the disclosure of the invention: they therefore play a role in the diffusion of knowledge.

 

IPR regimes are the set of interrelated institutions that shape the functioning of IPR and its connection with the economy. Patent regimes are national in nature, as patent laws are national. However, they share commonalities across countries, notably as national choices are strongly constrained by international treaties (like the Paris Treaty of 1883 or the more recent TRIPS Agreement of 1994). As a result, there is little diversity left across countries regarding the core, explicit rules that govern patenting, particularly between developed countries. As for developing countries, they are rapidly aligning their IPR regimes in accordance with the TRIPS Agreement, and the major remaining issues concern enforcement rather than legal alignment.

 

Patents are market-based instruments, which is the reason why they were included in the 1994 WTO TRIPS Agreement. They affect directly the downstream stages of business processes (sales) and have only an indirect impact on upstream activities (invention). In a globalised world, where the market for most innovative goods is world-wide, the impact of a particular country’s patent regime on its national competitiveness is often limited (e.g. a Danish biotech company will be more affected by the US patent regime than by the Danish one as it has much higher sales in the US). However, clauses that affect the early stages of the invention process (like the “grace period”, see below) have a direct impact on inventive activities.

 

The Patent Statistics Manual provides more information on the legal foundations of patents (sections 2.2 and 2.3), patenting procedures across jurisdictions (chapter 3) and the rationale for patents and their economic impact (section 2.4).

 

PUBLIC SECTOR RESEARCH

 

How are IPR regimes relevant to the contributions of public sector research activities to innovation performance?

The incentive to invent is not an essential motivation for applying IPR to research universities and PRIs, as their research is mainly funded by public resources. The rationale for patents in PRIs is rather on the commercialisation side: it has been found that a number of inventions emanating from public sector research remain on the shelves as their development would require significant downstream investment by commercial companies, investment that will happen only if companies feel protected regarding possible competition at a later stage. Patents are the proper response to this concern.

 

The Bayh-Dole Act (passed in the US in 1980) instituted a uniform patent policy across federal agencies and removed many restrictions on licensing. It allowed universities to own the patents arising from federal research grants. Bayh-Dole also stipulated that researchers working on a federal research grant are required to disclose their inventions to the technology licensing office, which will chose whether to patent them or not. Similar legislation was then passed in almost all OECD countries in the 1990s and early 2000s, substituting in general the previous system of “professor’s privilege”, where the inventor could decide themselves whether or not to patent the invention and would in general own the patent. Sweden and Italy are the two remaining exceptions to this Bayh-Dole Act wave.

 

How do IPR regimes shape the interests, activities and resources of the relevant actors?

The relevant actors include:

  • Researchers, who are expected to be incentivised to pursue IP registration by the lure of money but also by the increasing inclusion of IP indicators in measures of performance.
  • Research performing organisations, which are expected to generate increasing amounts of their income through IP exploitation.
  • R&D collaborators [Beatrice, link to “R&D collaboration” under Activities and Outcomes] (essentially firms) who have had to adjust their expectations of the benefits of cooperation with public sector research.


What other factors and policies are relevant to IPR regimes and their shaping of the contributions of public sector research to innovation performance?

In addition to policies specific to research universities and PRIs (e.g. Bayh-Dole Act types of measures), a number of features of patent regimes have a significant impact on the use of patents by such research performers:

  • To what extent are basic inventions patentable or not? That covers inventions whose modus operandi and industrial application have not been completely clarified yet, notably in upstream fields like genetics and nanotechnology.
  • How developed are knowledge markets? Research universities and PRIs cannot themselves exploit their inventions as they have no manufacturing and marketing facilities. They therefore need to license out their inventions (possibly to their own spin-offs). Fluid knowledge markets require competent intermediaries and a robust legal framework (strong enough patent rights, predictable legal outcomes, reliable enforcement etc.).
  • How accommodating is the patent system to basic research? Are provisional patents and grace period available? These are two legal devices which maintain the right to patent an invention in the future while not having to fulfil immediately all the necessary conditions (notably in terms of exact description and non publicity before filing). They are well-fitted to inventions at a very early stage, when all their properties have not been worked out yet and when the inventor also wants to make a scientific publication
  • How high are patent fees? It can be reasonably assumed that research universities and PRIs (and some other actors like SMEs [link to high-tech SMEs] or individuals, often grouped under the “small entities” heading) are in general subject to more stringent liquidity constraints than large firms. As patenting is a sort of investment, the patent system could therefore be considered as discriminating against “small entities”. In order to compensate for that, a number of governments have instituted a discount on the patent fees as paid by “small entities”, often around 50% (the June 2011 US Patent Bill set the discount rate at 75%).

 

Public sector research

Module home

   Activities and outcomes

   Key actors

   Shaping factors

Economic development

Economic specialisation

Industrial ecology

Geography

Financial markets

Scope and scale of public research

Academic careers

PSR funding regimes

IPR regimes

Roles and status of HEIs/PRIs

Scientific community norms

Open innovation

   Core policy instruments

 

 

 

List of useful links