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APPROPRIATING

INNOVATION VALUE

Presented by: Elona Marku

In this lecture…

What is the appropriation of the innovation value?

Why is it important to appropriate the innovation value?

How do we appropriate the innovation value?

More insights on:

• The main methods used to extract information from patent data

• Patent free-of-charge databases

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WHAT IS THE APPROPRIATION OF

THE INNOVATION VALUE?

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WHAT IS THE APPROPRIATION OF THE

INNOVATION VALUE?

The degree of control on the technical progress and the extra profits that are generated by the firm (see Dosi, Antonelli, Malerba)

It refers to the benefits of the efforts of the innovation process

It is the basis underlying the choice to innovate rather than imitate

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WHY IS IT IMPORTANT TO

APPROPRIATE INNOVATION VALUE?

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WHY IS IT IMPORTANT TO

APPROPRIATE THE INNOVATION VALUE?

To gain and sustain the

COMPETITIVE ADVANTAGE

David Teece (1998) argues that the capacity of the firm to appropriate the benefits of its investment in technology depends on two factors: • the firm’s capacity to translate its technological advantage

into commercially viable products or processes

• the firm’s capacity to defend its advantage against imitators

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? How do we appropriate the innovation value?

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The concept of the appropriation of the

innovation value is strictly connected and

strongly intertwined with the tools that

guarantee the innovation appropriability

INTELLECTUAL PROPERTY

How do we appropriate the innovation value?

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Other factors that influence the firm’s

capacity to appropriate innovation value

Accumulated tacit knowledge

Lead times and after-sales service

The learning curve

Complementary assets

Product complexity

Standards

Pioneering radical new products Source: Tidd (2006)

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OVERVIEW OF INTELLECTUAL PROPERTY

Legal right What for? How?

Copyright Original creative or

artistic forms

Trademarks Distinctive identification

of products or services

Use and/or

registration

Registered

designs Registration

Patents New inventions Application and

examination

Exists

automatically

Trade secrets

External appearance

Valuable information

not known to the public

Reasonable efforts

to keep secret

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SOME IP FOUND IN A MOBILE PHONE

Patents:

• Data-processing methods

• Semiconductor circuits

• Chemical compounds

• …

Copyrights:

• Software code

• Instruction manual

• Ringtone

• …

Trademarks:

• Made by "Nokia"

• Product "N95"

• Software "Symbian", "Java“

Trade secrets: ?

Designs (some of them registered):

• Form of overall phone

• Arrangement of buttons in oval shape

• Three-dimensional wave form of buttons

• …

© Nokia

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PATENTS A legal title which grants the

holder

• the exclusive right to prevent

others from making, using or

offering for sale, selling or

importing a product that infringes

his patent without his

authorisation

• in countries for which the patent

was granted

• for a limited time (up to 20 years)

In return for this protection, the

holder has to disclose the

invention to the public

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WHAT DOES A PATENT LOOK LIKE?

Bibliographic information

• Inventor, proprietor, date of filing, technology class, etc.

Abstract

• Around 150 words as a search aid for other patent applications

Description

• Summary of prior art (i.e. the technology known to exist)

• The problem that the invention is supposed to solve

• An explanation and at least one way of carrying out the invention

Claims

• Define the extent of patent protection

Drawings

• Illustrate the claims and description

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WHAT EXACTLY CAN BE PATENTED?

In most countries, patents are not granted for business methods or rules of games as such, or for methods of treatment, diagnostics and surgery on the human or animal body.

Patents protect inventions which solve technical problems:

• chemical substances, pharmaceuticals

• processes, methods, uses

• products, devices, systems

For an invention to be patented, it must usually be

• new to the world (i.e. not available to the public anywhere in

the world)

• inventive step (i.e. not an "obvious" solution)

• susceptible of industrial application (utility)

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PATENTING

Advantages

• Exclusivity enables

investment and

higher returns on

investment

• Strong, enforceable

legal right

• Makes invention

tradable (licensing)

Disadvantages

• Reveals invention

to competitors

(after 18 months)

• Can be expensive

• Patent enforceable

only after grant (this

can take 4-5 years)

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COPYRIGHTS

Copyright protects any production of the human mind,

such as literary and artistic works • This production must be an original expression and not a mere idea

Economic rights: • relate to the economic exploitation of the work

• are freely transferable or licensable

Moral rights: • relate to a moral interest of the author

• are always retained by the author

It confers legal protection for a limited period of time

(minimum 50 years after the author’s death)

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TRADEMARKS

A trademark is any sign, capable of being represented

graphically, which distinguishes the goods and services of

one undertaking (company) from those of another

Many different types:

• word, figurative, colour, shape

Grounds for refusal

• Distinctiveness (absolute)

• When peaceful co-existence of marks is impossible (relative)

Potentially perpetual (renewal every ten years)

Risk of loss of protection if:

• not used after five years

• found to be invalid

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DESIGNS

A design is the outward appearance of the whole or parts of a product resulting from its features

A product is any industrial or handicraft item

Requirements for protection: novelty,

individual character

Exclusive right

Principle of territoriality

Duration • registered design rights: maximum 25 years

• unregistered design rights: 3 years

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TRADE SECRECY

• Formula, pattern, device or compilation of information,

unknown to others, that gives competitive advantage

• Common law or statute

• Unlimited Duration / No registration

• Cost (of maintaining secrecy, security, litigation)

• Reverse engineering, independent development

• Examples: (unpatented inventions, laboratory

notebooks, planning and customer information;

Financial, accounting, recruiting and legal information)

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• Patent analysis is defined by researchers as the method

used to transform patent data into useful information

• Patent citation analysis is a citation-based patent study

which uses a bibliometric technique to analyze the quality

of patents. It links patents at the same way that the

science citation links the papers’ references

• Patent trends provide a more dynamic overview to

monitor patent activity and to identify technological

change and innovation convergence at a firm-level and

sector-level

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METHODS USED TO EXTRACT

INFORMATION FROM PATENT DATA

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PATENT QUALITY and PATENT VALUE

Optional

More than 50% of the overall patent portfolio value is derived from just 3% of all patents More than 80% of the overall patent portfolio value is derived from just 10% of all patents

Source: Ceccagnoli et al., 2005.

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Patent quality is found to have a positive relationship with patent value

The three dimensions of patent quality based on citations:

• Impact • Originality (depth) • Generality (breadth)

PATENT CITATION-BASED INDICATOR

• IMPACT: number of forward citations. It

measures the influence of patents in further

inventions. More citations a patent receives,

higher its importance and consequently its

value is.

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PATENT QUALITY (Hall et al. 2001)

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IF VIEWS WERE FORWARD CITATIONS…

2.320.752.198 vs 1.697.477

Which song (patent) would have more impact?

ORIGINALITY: it uses the technological

classification codes of the backward citations

to measure the depth of technological

knowledge embodied in the patent.

Originality =

sij represents the forward citations of patent i that have class

code j, out of ni patent technology classes.

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ORIGINALITY (Hall et al. 2001)

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IF THE CLASS CODES WERE COLORS…

Which shoes closet

would be more original?

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GENERALITY: uses the technological

classification codes of the forward citations

to measure the breadth of the technological

knowledge embodied in the patent.

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PATENT QUALITY (Hall et al. 2001)

Generalityi =

in

j

ijt1

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tij represents the forward citations of patent i that have class code j, out of ni class codes.

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ABOUT GENERALITY…

Recycled bicycle tire foxing tape for

footwear and method of making footwear US 7874084 B2

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Patent technological trends allow to

identify not only the leading technologies

that are developed in the market but also to

have deeper insights on the sector and firm

strategy.

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PATENT TECHNOLOGICAL TRENDS

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PATENT TECHNOLOGICAL TRENDS cont’d

PATENT TECHNOLOGICAL TRENDS cont’d

General Electric (1995-2009)

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• ERICSSON

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PATENT TECHNOLOGICAL TRENDS cont’d

Searching for patents can be easy ...

Free worldwide patent information is available at

http://worldwide.espacenet.com/

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"Spherical object with floppy filaments"

Toy ball

Sometimes, the applicant simply doesn't want his patent to

be found …

… but some basic knowledge is needed!

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OTHER PATENT FREE-OF-CHARGE

DATABASES

http://appft.uspto.gov/netahtml/PTO/search-bool.html

www.google.com/patents

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Summary of the lecture…

Appropriation of the innovation value

• Patents

• Copyrights

• Industrial Design

• Trademarks

• Secrecy

Particular focus on:

• Patent analysis

• Patent citation analysis

• Patent trends (technological dimension)

• Patent free-of-charge databases

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QUESTIONS?

THANK YOU FOR YOUR

ATTENTION!

For contacts: elona.marku@unica.it

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