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Let’s further examine the reasons why firms would want to avoid traditional IP protection and what are the main pros and cons of open knowledge.
The first obvious reason we could think of is the reduction in cost it induces. If the R&D process is made all together with every firm baring a part of the cost, it requires less investment in R&D from one single firm to get the same result. It also increases the chances of success as everyone can benefit from the knowledge and experience of the others. But on the other hand, making everythin open also increases the incentive to free-ride on other’s inventions and can then lead to an economy with under-investment in R&D.
As hisghlighted in the article, one innovation is often the result of assembling and improving precedent technologies togther. Open knowledge allow then the innovators to have access to a larger variety of technologies with no cost. But paradoxally, once an innovation is made profitable, firms have a strong incentive to deviate from an open knowledge strategy as they would want to keep their competitive advantage for themselves.
We then see the importance of strong protection mechanisms, not for the inventors to prevent others to use its invention, but for the invention to remain open to the public even if the inventor tries to make it impossible afterwards. Cross-licensing is in that sense an excellent solution as it sets a legitimate framework for firms to open their innovation to others with the assurance to avoid long and costly legal procedures.
As for the interoperbility standards, the first beneficiary are in my sense the consumers who can avoid the switching cost from one product to another afterwards. For firms, relying on open innovation with specific standards allow them to create a netwok effect (Tesla knows that without a specific standards for electric cars, consumer will wait before buying and a wider grid of charging station will benefit them in the same proportion as other electric car manufacturer). But it has its cons as well, competition will be stronger and firms will need to differenciate their products from those of their competitors on other different characteristics. Consumers will then have the benefit of enjoying an increasing variety of products.
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This comment will focus on a specific topic in price discrimination, the concept of bundling that is influenced by cross-licensing agreements.
Bundling, is selling two or more goods together as a package, such as Microsoft Office package. Such a package raises the interest of the consumer since, its total cost is way below the price of each component sold individually.
Furthermore, it can surprisingly increase the seller profits. For example, while comparing separate selling and pure bundling, as mentioned previously, the last can be referred to a service that offers discount. This is well explained in Belleflamme and Peitz when they state: “If consumers have heterogeneous but uncorrelated valuations for two products, then the monopolist increases its profits under pure bundling compared to separate selling. It increases its demand by selling the bundle cheaper than the combined price under separate selling”[1].
This statement can be explained by the following intuitions and principles. On the one hand, the problem of selling goods and services individually, is that, the demand for the individual product is highly variable. Which forces the firm to make a selling choice that if is high, will tend to reduce the amount sold and if is low, will the do the opposite. On the other hand, the advantage of using bundle, is that the variability is much lower. That, gives the incentive to the firm to price closer to the mean and so, to increase and grab more consumer surplus. The valuation of a bundle is facing less variability with the bundling practice which decreases uncertainty for the firm “for the same reasons that holding a diversified portfolio reduces unsystematic risk”.[2]
It is relevant to point out in such case that, even though a negative correlation may be helpful, it is not necessary for the bundling to succeed. More important is that the demand for the bundle is less variable than the demands for the individual products. Moreover, a zero marginal cost is also useful. Since it may not be wise to sell a product to consumers that value it at less than the cost.
When marginal costs are zero, it could make sense to bundle even thousands of goods together. Base on the assumption that consumers have different valuation for different goods. When the goods are combined, the value of that result is more intermediate and closer to the mean. In terms of the demand curves, that set up implies that the demand curve is linear for an individual good. But as the number of goods within the bundle rises, it increases the quantity demanded to the mean. Thus as mentioned in the article, “companies grant each other access to their respective intellectual property rights portfolio are a widely used strategy to foster innovation by reducing the risk of costly court battles”, these could lead companies to increase even more the number of article included in the bundles. Owing to that concentration at the mean, just a small reduction in price will increase even more the quantity demanded. Therefore, a drop in the bundle price will skyrocket the selling.
Nevertheless, goods with zero marginal cost often have high fixed costs. That is why, to the extent that increased profits increase investment in fixed costs of creation, bundling will tend to increase consumer welfare as well as efficiency and thus benefit everyone.
To go even further, firms can practices mixed bundling, and sells products separately in addition to the bundle. That strategy will maximize net revenue and generate more profit than the pure bundling alone when marginal costs are positive.
To summarize, pure bundling can increase revenue when the demands are negatively correlated, when a price discrimination is not allowed and when marginal costs are zero. Whereas, mixed bundling can increase net revenue even when the marginal costs are positive.
In his review of the literature, Kobayashi underlines the particular model where a monopolist produces two goods while a potential competitor has to pay a fixed cost to enter the market[3]. While before bundling was seen as a barrier to entry if the bundling equilibrium expected profit was inferior to the non-bundling equilibrium expected profit for the entrant. But now, could bundling still be used as a commitment device for spending in R&D in the monopoly market, which effectively reduces the probability of entry in this market?
[1]Industrial Organization Markets and Strategies, Belleflamme & Peitz, 2010, pp. 259-278
[2]Bundling and tying: should regulators use the per se approach or the rule-of-reason approach? Lessons from the economics literature, Di Giannatale & Elbittar, Vol. 8, No. 2, Autumn 2012, pp. 34-40
[3]Does economics provide a reliable guide to regulating commodity bundling by firms? A survey of the economic literature, Bruce H. Kobayashi. Published in Journal of Competition Law & Economics, Vol. 1, No. 4, December 2005, pp. 707-746
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In this comment I would like to review an application of the opening up of knowledge which is the communities’ innovation. It illustrates greatly the reasons why managing open knowledge can prove to be efficient. Similarly, to an open-source software as discussed in the blogpost, here the communities contributes to the knowledge of manufacturers in an open source projects to flourish and benefite from the development of a product. While one could think of the drawbacks resulting from the distribution of intellectual properties attached to something, the exchange of knowledges brings extended benefits for the manufacturer as well as for the user.
First, the user provider may not have the financial or implementation resources to set up the project himself. The user providing knowledge to the project can expect to benefite himself from his own use of the innovation but considering to license the project in the market place would require costly endeavors with uncertain outcomes. In fact, the manufacturer through his distribution network and long expertise in the field has a clear advantage in getting the innovation universal.
In order to set up a good open source project, there are necessary conditions to meet ensuring that the provider will bring a real added value to the project. On the one hand, users will have sufficient incentives to innovate when they expect the benefits of innovating exceeding their costs. Their costs can be considered as their diffusion labor and their loss of intellectual properties, relatively low in the position of a user. In fact, users are in the best position to know what the innovation must be. Manufacturers in a context of open source innovation are therefore well informed about the real needs of the consumers. Moreover, these behaviors are not stationary neither, users can therefore be considered as a free open source of prototype information evolving with the environment.
On the other end, the open source project will inevitably reveal information to competitive manufacturers. It can appear to become a threat since they have the distribution network and expertise to widespread the innovation. But as mentioned in the blogpost, the aggregation of standards will first support the innovation since competitive firms are now developing in the same direction, as well as setting up incentives to boost a common market.
To conclude, I believe that sharing intellectual properties is nowadays the best way to develop technologies. Innovations have better chances to raise from heterogeneous sources than from a single mind. The challenge is understanding which intellectual property are needed for an innovation and which are to be opened up.
Bibliography.
– Gassmann, O. (2006) Opening up the innovation process: Towards an agenda. Available at: https://www.alexandria.unisg.ch/29184/1/06_R%26DMgmt_editorial_towards%20an%20agenda.pdf (Accessed: 21 December 2016).
– Von Hippel, E. (2001) Learning from open source Software. Available at: http://adaptknowledge.com/wp-content/uploads/rapidintake/PI_CL/media/InnArticle.pdf (Accessed: 21 December 2016).
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The concept of cross-licensing discussed in the article interests me the most. Although it comes across as a means to promote information sharing and healthy collaboration on innovation activities, it does pose the following threats to any industry at large:
1. Threat of cartelization – If few dominant firms in an industry decide to enter a mutual agreement of sharing IP information, then they may well feel incentivised to form a cartel. They may decide to save the individual research costs through the association and share the benefit in terms of high profitability by not passing on the cost savings to the end customer.
2. Lack of breakthrough innovation – If competing firms join hands and enter a cross-licensing agreement, they may end up setting the stage for the future research work for each other. As a result, all subsequent initiatives will simply build upon the existing base, and hence may carry forward the sub-optimal innovation. Neither of the firms will think ‘out of the box’. While this approach seems to prevent duplication of effort, it does add to the threat of replication of errors across firms due to knowledge sharing.
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The article talks about the relevance of cross-licensing agreement in technical fields through the examples of Google & Verizon and Cisco & Samsung. Another industry that may benefit from a similar agreement is the pharmaceutical industry. Leading pharmaceutical companies may consider collaborating through a cross-licensing agreement and share their research at least up to the lead compound generation stage. In the interest of their own individual profits, they may decide to maintain secrecy beyond this stage and develop their own chemical compounds independently. Considering the heavy monetary investments in drug discovery R&D, sharing of knowledge even up to the lead discovery stage may accelerate the process, alongside lowering monetary and time costs.
Diseases like cancer, diabetes and the like are found occurring at high rates all across the world. With the intention of maximising the greater good, it may well be suggested that pharmaceutical companies tackling these diseases must adopt the open source licensing approach. However, that approach may call their profitability into question. This strategy may be adopted with a caveat – if the national government sponsors the R&D projects of leading pharmaceutical companies in order to foster R&D cooperation through open sourcing, then these firms will be incentivised to share information. The revenue generated from the sale of the final drug must then be distributed among all the participating firms by the government. However, this is difficult to achieve in countries with low intervention from the government on matters of public health.
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As we have studied in the class of economics of innovation, investing in R&D is a costly process, which does not always end up with success. In fact firms, when they cooperate, maximize the probability of success of the R&D. Let’s say for example that if a firm invests in research in a specific technological process that will improve its productivity (and thus its marginal cost), a lot of time might pass before the results of the research can be applied to the production process.
The term open innovation refers to the collaboration between companies to create innovative products and services, sharing the risks and the rewards during the process. It allows firms to reduce research costs (for example if they conduct research in the same lab), spread risk and specially beeing quicker at bringing innovation to the market. Even without mentionning the cumulative process of innovation the fact that firms are allowed to share their knowledge and information represents a huge evolution and might be welfare improving.
So it seems logical that coordinating the research and sharing the information will in a first stage make the innovation more likely to happen, and then the coordinated efforts will accelerate the process. This is basically the idea shared by Elon Musk : Tesla has the intellectual property, the incentive, and the means to carry through the research. The reason they chose not to sue any good-faith use of the technology covered by Tesla’s patent is that they need the cooperation of much companies to adress the carbon crisis and launch an eventuel ecological transition. Furthermore the idea of open innovation can be applied to almost every industry : from IT to Healthcare. As an example the « open access malaria box » project provides free access to 400 compounds with anti-malarial properties. Then those who use the compounds to do their own research may find usefull treatment applications. The deal beeing that if they find something they must share their result and make the new compounds accessible to technology.
Moreover, this way of doing business highlights a new behavior of firms, which, as illustrated by Tesla’s example, take the risk of sharing the information for a greater good. Some might say it could jeopardize independance and future profits of a given firm, but, in the end, we have more important issues to treat right now which need to dealt with as soon as possible. This is exactly the way Elon Musk adresses this issue, and, thanks to shared knowledge Tesla’s CEO has conceived a project of gigafactories that might be the first step to drive our world into ecologic transition.
http://www.ipdigit.eu/2015/06/opening-up-knowledge-management/
https://www.weforum.org/agenda/2015/02/the-benefits-of-open-innovation/
http://www.forbes.com/sites/ericmack/2016/10/30/how-tesla-and-elon-musk-could-save-the-world-with-gigafactories/#f9907cd37273
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The fact that more and more products result from a bunch of technology points out that there is an incentive to gather common knowledge. Consumers also need compatibility among all of these technologies (products need to be plugged and played) which implies some kind of collaboration between firms. Because firms need other technologies, exchange of knowledge is required.
Cross-licensing can allow firms to share their respective IP rights among contractors. They can also allow other firms to get access to their technologies by open-source licensing patterns. The open-source licensing could lead to adoption of a common standard; this is what we call standard-setting organization. Firms won’t seek to fight again each other to promote their technology upon others because only one technology prevails. Because patent could still be active, it isn’t free of charge for firms (except for open-source licensing patterns) to adopt common standard. Moreover patent holders could benefit a lot from it. This implies to regulate the industry of patent to prevent abusive use of IP right when such standardization appears. However standardization would also slow incentives to innovate because providing an innovative way to do something would not be accepted so easily by consumers, even though it is more effective. (e.g. the computer keyboard which still uses the same pattern than a typewriter. Yet AZERTY or QWERTY systems aren’t the most efficient ways to increase typing speed.)
Challenging old technology by new one is then the best alternative to increase innovation even though standardization of skill is the best way to improve compatibility among products.
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I don’t think that the standard setting organization’s rules stand in the way of innovation. I think it’s a source of development to our world. My mom always says to me “we can not do anything alone” and it’s true. To create and to innovate, people have to be more and more inventive and pay attention to the different patents already in circulation.
If we want to develop new things and improve the different sectors where it is possible to do, people have to work together.
In the US, they have create ” law” to allow private companies, universities and government agencies to work together and speed the commercialization of technology. It names CRADA (cooperative research and development agreement). Many companies use this agreement and we can observe that innovation is not blocked.
Standard setting organization’s rules is a good thing. Imagine we can connect to internet with an apple computer in Starbuck but not with your Samsung smartphone. We will be very disappointed ! And we will try to find a other solution like by only apple products or samsung products according to the places we visite the most. And this will be a loss for the producers, and without the money earned by selling their products they will not be able to have enough capital to invest in R&D.
These rules may seem a little bit restrictive but it’s for the well being of everyone.
https://www.ott.nih.gov/cradas
https://en.wikipedia.org/wiki/Cooperative_research_and_development_agreement
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We used to think that the only way to increase innovation was to protect the IP rights of each person by making them search any other possibilities of changing or bypass it by creating something new. But since years now, we have witnessed new possibilities of innovate by letting use different software, platforms or even patents freely. We can quote different examples such as Soundcloud, edx or Tesla. These open sources can create different new communities (Soundcloud) or could improve the current work. In this essay, we will try to focus on the benefits of knowledge sharing and why is it rising in different sectors or companies.
First, let’s talk about why we have open sources. One of the big part why people are usually letting people use their Ip rights is because they have a goal that can’t be reach with money. We can have different examples with this but let’s take the example of Elon Musk (SpaceX and Tesla). In 2015, he shocked the world with those words: “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology”. The dream of Musk beyond those word is to have a “greener” world, with less carbon footprints and pollution. We can see with this example that is letting people only because he wants everybody to improve his work and at the end to have all electric cars. We can quote another example like the platform of IBM, Nokia and Sony. We can see that they have a goal, they are willing to do something for a cause they wish to improve. If we take another sector like the software one. We can see that, people just want to provide something to help people in their life and create a community around it. (Soundcloud, Linux, Youtube,…)
Secondly, we can see that there is plenty of different advantages of open sources for business. The security could one of them. Indeed, with the linus law who says:” “Given enough eyeballs, all bugs are shallow.” It means that if lot of people can see and test a set of code, the more likely any flaws will be caught and fixed quickly. We can take a counter-example here with windows and Apple. The only one who knows all the bug of their products is the company it-self. It means that only the developers can see all the bugs and it’s much more less than the rest of the world. Bug are said to be “repaired” much more quickly when it’s open source. The quality of the software. If it is open to anybody, then you will have a huge amount of people giving you tips to improve your actual product. That was mainly for software. But we can have an example of product who wasn’t patent like the Hyperloop (Elon Musk). We can see that numerous of different companies have worked on it to give improvement on it. Thus, we have various of different possibilities that we wouldn’t have with a patent. As a matter of fact, we could develop at least ten other advantages like customizability, freedom for the consumer, flexibility, try before you buy, …
Thirdly, we can see that the future of open source is shining. Why? Only because open source is no more something unusual but has become a norm. To explain my point, we must go back in the 80’s when the first free software was released. We can see that the 80’s brought the first free software but during this time it wasn’t something that was popular outside the software sector. In fact, it stayed in the sidelines during the 80’s. But with Linus Kernel, in the 90’s a new movement emerged. Today, it has become a norm and no more an issue. Plenty of different big companies have different open sources plan like Microsoft of Facebook.
To conclude, we can say that open sources are going to rise in the future due to the various benefits they are bringing. We are only at the beginning of it.
http://oss-watch.ac.uk/resources/fossandpatents
http://www.pcworld.com/article/209891/10_reasons_open_source_is_good_for_business.html
https://sourceforge.net/blog/the-evolution-of-open-source/
https://fr.wikipedia.org/wiki/Loi_de_Linus
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Opening IT rights is growing up through cross-licensing, open-source licensing patterns and FRAND licensing. I think it is necessary, especially in the field of sustainable development to counter the climate change. Companies have to put their profit behind the common public interest and gather their skills through more collaboration. Moreover, it seems it could be profitable for both companies and public. I will focus on open source innovation and open source community.
An example of open-innovation reflects these advantages. Few years ago, the drones were exclusively used for military purpose but in 2006, the hurricane Katrina provoked a deep change for the use of drones as they were used to find survivors. Since this date, drones are effective in many fields and are spreading very fast. This very development was partly due to the fact that drones manufacturers put their development tools and software in open-source access so everyone can develop the drones. It was a great success as final customers are the ones that know at best their needs, so they develop the drone that fits perfectly for their use (crop analyze, filming movies, etc.).
An other successful open innovation was the Lego platform that allows hobbyists to develop their own Lego, the best ones being produced.
So companies can delegate some development work, diminish costs and increase innovation through open-source community.
Sources:
https://opensource.com/life/15/11/8-open-source-lego-projects
http://droneanalyst.com/2014/05/23/which-is-better-open-source-or-proprietary-drone-software/
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As we have already discussed it during the class or in previous article of IPdigIT, the whole patent system is a controversial issue. In some cases, property rights are becoming a drag on innovation. As a matter of fact, it is complex to apply for a patent application. The more obvious issue is related to the paperwork. Application has to be written in different languages and has to be processed in different offices all around the world (all of them having different rules). Moreover, the innovator has to make sure its innovation does not overtake a previously patented one.
When they try to deal with all these issues, inventors are losing time and even money trying to protect their innovation. This can give them disincentives to innovate in the first place.
All those arguments give me reason to believe that open innovation could be a solution for innovators’ trouble. First of all, it will facilitate life of inventors that need some information to develop a second generation innovation (see the article “Do patent rights facilitate or impede cumulative innovation?” online http://www.ipdigit.eu/2014/11/do-patent-rights-facilitate-or-impede-cumulative-innovation/). Furthermore, it gives some random people access to some knowledge, like free tutorials or textbooks on some free-access platforms. According to me, this culture of knowledge sharing is important. It allows people to share different things in a world where people were becoming more and more individual.
Finally, looking at the recent analysis about climate change, it is essential to take advantage of all the emerging possibilities. Open innovation is one of them. More and more open innovation’s initiatives are used to “tackle climate change”. For example, Richard Brason (founder of the Virgin’s group) and Al Gore have launched such an initiative. Their goal is to find new approaches that may help reducing carbon dioxide levels in the atmosphere. They call on innovators to make submissions within 5 years. This initiative needs to be seen by others as a leverage for the innovative capacity of the world to solve this worldwide issue.
If people could see open innovation as a way to solve real issues (climate change among others), it could be used for a great purpose.
Source:
Wikinomics (2007). Open innovation to tackle climate change. Online http://www.wikinomics.com/blog/index.php/2007/02/09/open-innovation-to-tackle-climate-change/
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Although the number of patents filed has significantly risen for the past 5 years in some countries, like in China where more than 1 100 000 patents were filed to the EPO in 2015 – which is almost twice the amount of 2012 – it does not represent a general trend for patent filing among all countries. On the contrary, we observe that for most countries this number levelled off or only slightly increased in the last few years, like it is the case for Germany. (1)
Hence, we could wonder if the expansion of knowledge sharing bodes the disappearance of patents. Several arguments support that theory, and I will try to develop some of them here.
Tesla or Toyota may have given the hints of that turn in knowledge management when they made their patents on green technology free from royalties. Driven by the same sustainability concerns, some private companies refuse to file any patent on their innovating technology. It is the case for Novamont, an Italian firm that is the leader in the bioplastics sector. This approach makes sense if you consider that filing a patent means going through a complex and usually expensive procedure; that trouble seems meaningless if you do not intend to use the patent to impose license fees.
Another reason why patents could disappear is that their desirability is questioned when it comes to cumulative innovation. In that situation, patent rights may impede on innovation because it becomes too costly for an innovator to gather all the permissions needed.
This argument brings another problem on the table, which concerns patent trolls, a matter that has been developed many times in this blog. Patent trolls represent an abuse and most of all an inappropriate use of patent rights, bringing into light one of the destructive effects that they imply.
However, it is important to acknowledge that patent rights may have lost some power of protection. Small companies like Sonaca have seen their patents more and more often infringed by other companies without having the necessary means to sue them. This could explain why patent litigation decreased by 13% last year. (2)
These illustrations draw one of the possible destinies for patents showing off some of their weaknesses, but it is certain that patents have been very useful in the past and will be continue to do so.
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I would like to talk about cross-licensing agreements. As it is explained in the article, this kind of agreements involve two or more firms where each firms allows the rest of them to have access to its intellectual property. This is something very interesting from an economic point of view, because it avoids litigation among companies involved and provides incentives to innovation.
This kind of agreements are very common in industries where there are many overlapping patent rights, because firms can produce in that industry without having the fear of infringement. When intellectual property rights are not well designed, there is an insecurity and a fear of infringing those rights, so firms prefer not taking risks and not investing in innovation. However, if these agreements operate in a market, companies lose that fear because there is no probability of litigation and they have more incentives to invest in R&D.
Moreover, cross-licensing can reduce transaction costs, as firms now only negociate once to get several patent licenses while previously they had to negotiate the access to each intellectual property. Finally, these agreements may be useful to fight against the problem of stacking royalties, which basically means that manufacturers have to pay multiple fees when access to different patents is required, making production and investments unprofitable.
Thus, we see that cross-licensing agreements may have positive effects on innovation and production: elimination of the risk of litigation, reduction of transaction costs, gathering of complementary technologies, … All these efficiencies gains can bring lower prices for consumers, so that improving consumers’ surplus. Nevertheless, it is also important to focus on the impact that these contracts may have on market competition.
Some economists think that cross-licensing agreement might lead to anticompetitive practices such as as fix pricing, which can reduce consumers’ surplus. As companies charge a variable royalty for their IP rights, they will set prices according to those fees. This implies that, if the level of royalties is too high, prices will raise above the competition level, especially when patented technologies are complements. In addition, these agreements may act as barriers to entry, as they allow incumbent firms to have access to patent rigths less costly that potential rivals, preventing them from entrying the industry.
As a conclusion, i think cross-licensing agreements may be positive for society, as they facilitate the access to patented technologies, incentivating cumulative innovation. However, they can also be used as a way to reduce competition among firms, which is negative from a social welfare point of view. Hence, regulators must be pay attention to these practices in order to ensure that they promote innovation and don’t become an obstacle for competition and production.
Sources:
http://ec.europa.eu/competition/consultations/2012_technology_transfer/study_ipr_en.pdf
https://www.justice.gov/sites/default/files/atr/legacy/2014/05/30/chapter_3.pdf
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Thinking about open-sources make me think about a sentence, that’s an important actor of Europe and worldwide business which had told me this one, it’s a short one but the meaning is huge and so true; “Business is a give and take”. Why do this sentence is even more true today ? Which is the real goal behind open-source ?
First of all, to understand the purpose of open-source we have to think just a moment about the level we’ve reach today for the global knowledge across the world. Years ago, when Newton’s apple felt down from the tree an individual and long term reflexion had begin for him and the gravity was born, but today this question about the reason of the apple’s falls seems “easy”. The point is every question have an answer and every answer have many questions about, isn’t linear it’s exponential, each time we discover something it opens the door for a lot of new discoveries. That’s what is all about, open source isn’t according to me a choice for a minority of altruistic persons but rather a mathematical obligation link with global knowledge grown.
Secondly, in my opinion an innovation that’s gonna increase the link between the open source online and concrete live is the 3D printer. Because lot of persons which aren’t open source’s users yet, are gonna discover all the advantage of this method, with time I think that 3D printers will change lots of habits and of course open source too.
From a business and economic point of view, create a patent and defend it could cost a huge amount of money, a huge waste as we have seen in the example between Samsung and Apple. If companies decide too cooperate, their R&D’s result will be improve. Without all that waste of money in trials and patent’s war the research’s budget would be increase and finally even if they are a few companies to sell the same technology, the improvement for society and for companies will be significant.
As an actor of tomorrow, I hope that people would understand the full potential of our actual knowledge, and how it can grow if we decide to collaborate rather than fighting, to achieve the maximum from what each know and not from a patent.
Sources:
https://opensource.com/resources/what-open-source
http://www.open-electronics.org/which-is-the-best-open-source-3d-printer/
https://www.cnet.com/news/in-patent-war-apple-and-samsung-may-both-be-losers/
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I think that opening up knowledge management is a great idea. As said in the article above, “not all technology can be produced in isolation and innovation often results from a cumulative process” and “products need to be compatible with those produced by other firms” which are two strong arguments that makes sharing IP rights necessary.
I will add 2 arguments in favor of this trend:
First, the more firms we have sharing the rights, the more firms we have on the market offering products using these rights, which is good for competition and ultimately for consumer’s welfare.
Second, the more firms we have sharing the rights, the more potential innovators we have on the market, because as we’ve seen in the course, oligopoly gives better profit incentives (replacement effect).
But are old defensive IP strategies better for innovation? I think this question must be discussed trough a rigorous economic study but I think that the result is not clear cut. In my opinion the result would be similar to what we’ve seen in the lecture about market structure and incentives to innovate, that is to say that the optimal IP strategy is between the traditional one and the new sharing trend:
Only one firm having the rights is on one hand harmful for innovation as the firm has no incentive to innovate but on the other hand good for innovation as entrants are motivate to overtake incumbent firm.
Multiple firms using the rights can be good for innovation as I stated it above but bad on the other hand as firms are smaller (so less means to invest in R&D).
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Open innovation strategies are more and more present, under several forms such as FRAND, open-source and cross-licensing patterns. A study has shown (2015, Purdue & Berkeley) that among 120 of the largest firms in Europe and the United-States, 78% practice open innovation. For example, ENGIE has created an Internet platform dedicated to open innovation. On the website, startups, entrepreneurs and project initiators can submit their ideas and skills to help design and create innovative and efficient energetic solutions. (http://openinnovation engie.com/fr/?gclid=CMnfjcjggtECFY8Q0wodjLYHKg)
This way of managing knowledge obviously has advantages such as increasing the compatibility between technologies, find new solutions to fight against environmental issues, or reducing the risks for the businesses. However, it also has its limitations and disadvantages. First, the implementation and process coordination of open innovation are costly. Then, it reduces the independence and flexibility of the firm primarily owning the Intellectual Property on the technology, as well as its creativity potential. Finally, the legal aspect is also creating difficulties for example with intellectual property spillovers (Enkel et al., 2009; Müller, 2013; Veer et al., 2013).
A good example of open innovation failure is the case of the Boeing 787 Dreamliner. Boeing has been working in an open innovation space with more than 50 suppliers, bringing their innovation and expertise in to design the Boeing 787 Dreamliner. However, it can be considered as a failure because of the safety concern (“headline-grabbing engine problems” (http://business.time.com/2013/01/11/how-safe-is-the-boeing-787/)) and delays related. (http://customerthink.com/3_open_innovation_failures_boeing_lego_and_pharma/).
http://fr.slideshare.net/RCODI/shaping-the-future-of-open-innovation
https://timreview.ca/article/980
http://openinnovation engie.com/fr/?gclid=CMnfjcjggtECFY8Q0wodjLYHKg
http://customerthink.com/3_open_innovation_failures_boeing_lego_and_pharma/
Müller, S. 2013. Innovationsrecht – Konturen eines Rechtsgebiets, Zeitschrift für Innovations- und Technikrecht (InTeR), 1 2, 58–71
Enkel, E., Gassmann, O., & Chesbrough, H. 2009. Open R&D and Open Innovation: Exploring the Phenomenon. R&D Management, 39(4): 311–316.
Veer, T., Lorenz, A., & Blind, K. 2013. How Open Is Too Open? The “Dark Side” of Openness along the Innovation Value Chain. Paper Presented at the 35th DRUID Celebration Conference, Barcelona, Spain, June 17–19.
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Fortunately, nowadays, we live in a world of widely distributed knowledge where companies cannont afford to rely entirely on their own research and thanks to open innovation they can and should use external ideas as well as internal ideas in order to advance the developemnent of new technologies and expand the markets for external exploitation of innovation. Open innovation means a change in the use of intelectual property and it is focused on uncovering new ideas, reducing risk, increasing speed and leveraging scarce resources. The main principle of open innovation is that building a better business model is better than getting to the market first.
Then, companies should buy or license processes or inventions from other companies and take outside their internal inventions not being used in their business through licensing or spin-offs. Doing that, companies can connect with someone who has already developed the technology in need, reducing the risk of innovation and increasing the chance of success. Other advantages are the improvement in development productivity and the reduced cost of conducting research.
Nevertheless, implementing a model of open innovation is associated with a number of risks and challenges, such as the risk of loosing competitive advantage as consequence of reavealing intelectual property, or the challenge of controlling innovation, which becomes more complex, as well as regulating how contributors affect a project.
As said in this article, open innovation may also refer to the adoption of common standards for a particular industry. The Standard Setting Orgaizations (SSOs) establish these standards in order to ensure compatibility and interoperability. The advantages of these organisations are that they reduce production and transaction costs, increase efficiency and investment in innovation, and make entry easier in the market.
On the contrary, there is a big disadvantage: the risk of anti-competitive abuse. As technology chosen lacks the credible substitutes, the owner has larger market power so he may impose high access rates, which is known as “hold-up”. SSOs require patent owners to disclose them before the adoption of the standard and to commit to a license under FRAND conditions. The European Comission is the one in charge of monitoring the compliance with FRAND conditions ex-ante and ex-post.
To conclude, it only remains to say that sharing the intelectual property is the best way to keep developing new technologies. If we profit from others’ use of our IP, and we buy other’s IP whenever it advances our business model, it will be advantageous for innovation, and that’s for everyone’s sake.
Sources:
-http://www.ninesigma.com/open-innovation-resources/what-is-oi
-https://en.wikipedia.org/wiki/Open_innovation
-http://www.openinnovation.eu/open-innovation/
-https://www.ets.org/Media/Research/pdf/RD_Connections7.pdf
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We find that there are more and more openings of intellectual property, the article cites examples of open source software, Tesla, etc. What are the reasons that tend to spread this philosophy of sharing intellectual property ?
First, it is often fundamental for innovative firms to rely on certain knowledge. Therefore, they can not start from 0. They can therefore choose to share their information with others in order to benefit from the knowledge that others have already been able to produce.
Many companies have already made this choice, whether in the sharing of their discovery or in the use of open source programs and the benefits they derive from it are often very large : We note that these companies are much more efficient, Whether in terms of innovation (It can be seen that companies that operate in the free sector in France invest on average more than 10% of their turnover in R & D.) Or financial health. Engine of economic growth.
Another strong point of open source is the fact that 61% of users are involved in the development of the program they use, which means that they are constantly improving open source products so that they Respond more and more precisely to the expectations of users. Even the European Union has opted for open source services.
The openness of intellectual property also sometimes depends on the convictions of each individual, some will place sustainable development, seek remedies and solutions against certain scourges of society before their personal enrichment and do not hesitate to openly share their discoveries with The company without asking for compensation in return in the hope that their contribution will help resolve a sometimes untenable situation for some people.
For all these reasons, the growth of open source has been growing for several years now, benefiting many different players in the company.
Sources :
– https://www.pac-online.com/lopen-source-v-ritable-booster-de-la-croissance-du-num-rique-dici-2020
– http://ec.europa.eu/dgs/informatics/oss_tech/index_en.htm
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Open sources and knowledge is a rising practice but only a very few companies or individuals go for such a freedom of knowledge
I will divide this comment in two parts, first, the decline of IP rights and how it is perceived nowadays. Then i will provide you with a very concrete example of a free knowledge and sources sharing actions. This is a growing process.
Patent and IP rights have risen in order to guaranty a certain security for the inventor or creator of a product, an idea or a service, and in order to ensure him that no one could copy him legally. But this practice encounters many legal issues for those who don’t know that some inventions already exists, or could even lead to unfair behaviors from competitors. The number of patent litigation has done nothing than increasing since patents exists. In the United States it rose from less than 1000 to more than 5000 in 20 years with the biggest increase in the last years. Furthermore, it appears that people dont care so much anymore about patent, they go with heir own ideas and don’t pay attention to wether it is already patented or not (GSK intervention in Innovation management class November 2016).
Now, concerning the free access to sources and knowledge, let’S take the example of Gunter Pauli, initiator of the Blue Economy business model.
The Blue Economy is the philosophy of the Zero Emissions Research Institute (ZERI) in action. ZERI is a think tank founded by Gunter Pauli, which was ranked 7th by the University of Pennsylvania on in the category of Think Tanks with the Most Innovative Policy Ideas/Proposals (McGann, 2016). The Blue Economy strives for having the best for health and for environment at the cheapest price, “thanks to a local system of production and consumption that works with what you have” (The Blue Economy, 2016). Moreover, it “responds to basic needs of all with what you have, introducing innovations inspired by nature, generating multiple benefits, including jobs and social capital, offering more with less” (The Blue Economy, 2016).
But the point here is not to describe the concept but to show you that some people have already understood the advantages for our planet and society of letting free access to their own discovery. Gunter Pauli has not filled one patent on Bleu Economy and is trying to spread the idea of the Bleu Economy concept all around to encourage people to act in more responsible ways and become actors of the changes.
As conclusion, I wanted to highlight by this comment the importance of giving access to knowledge, we can only grow better and bigger all together and the changes ARE happening. It is a long term vision but as explained patents are not efficient enough to create the maximum society welfare and opening sources could be an alternative.
McGann, J. (2016). 2015 Global Go To Think Tank Index Report. TTCSP Global Go To Think Tank Index Reports. Paper 10. Retrieved from http://repository.upenn.edu/think_tanks/10
The Blue Economy (2016). The Blue Economy Principles. Retrieved from http://www.theblueeconomy.org/principles.html
http://www.ipwatchdog.com/2013/04/09/the-rise-of-patent-litigation-in-america-1980-2012/id=38910/
http://www.itu.int/net/itunews/issues/2011/07/38.aspx
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There are a lot of reasons why Open Innovation becomes more and more popular among several different entities that go from companies to public organizations. That’s why I’ll will divide my comment in 3 parts to be able to talk about these different entities. Firstly, I’ll discuss the criteria for companies to instore open innovation or not. Next, I’ll discuss the advantages for software companies to strongly consider Open Innovation, more precisely Open Source Systems (OSS). And last, I will talk about the EU that embraced Open Innovation.
Companies should consider open innovation (OI) if they want to see in a few time their creation used, shared and build by others. http://creativecommons.org/about This is mostly the case for software companies but also with normal companies. More particularly, a company should pose some questions to know if Open Innovation is a good idea. These questions go from; What kind of Open innovation is best for my organization; Are we part of the right ecosystem; How do we access appropriate technological facilities; What about our human capital? than you better make it open to others. http://implementconsultinggroup.com/media/289053/a-guide-to-%E2%80%9Cefficient-open-innovation%E2%80%9D.pdf
The benefits of OI are significant. Firstly the company is more cost efficient by leveraging other innovators’ ideas. Therefore the organization can focus more on its specific bottleneck. Secondly, the company will share its risks and rewards because they collaborate with the outside. Thirdly, the company will have more networks and do more branding through it bigger network customers, suppliers and business partners involved in the open innovation. Finally the company will have a higher royalty income. Because by offering ideas and technologies to the outside, an organization may generate additional income through licensing agreements, selling patents, spin-offs, etc… The success of the open innovation will off course depend if these four dimension mentioned above are well considered. http://implementconsultinggroup.com/media/289053/a-guide-to-%E2%80%9Cefficient-open-innovation%E2%80%9D.pdf
Secondly, Software companies have without any doubt a lot of benefits of embracing open innovation, more precisely OSS. In any case a lot of software companies have already embraced OI. This is because a lot of software firms fear that software patent protection has become so strong that it risks undermining innovation. 2010, Belleflamme P. & Peitz M., Industrial organization “Markets and Strategies, page 535
Behind the advantages of cumulative innovations and compatibility (http://www.ipdigit.eu/2015/06/opening-up-knowledge-management/)
, it is worthy to detail that there are numerous advantages for normal businesses to use open source software and that it is therefore in the interest of software companies to make their software free.
Firstly, the quality of open source programs will increase significantly. It is common sense that the more people work on something, the higher the probability that quality of it is higher. This is why open source software is mostly of a higher quality than just commercial. But not always, if we look to the example of Wikipedia and Microsoft Encarta, Encarta was more professionally developed than Wikipedia and sources were more reliable but this is not the case with Wikipedia.Secondly, open source software is more customizable, closer to the preferences of the customer and there is more freedom in it. Thirdly, there is more interoperability because OSS is much better in adhering to open standards. Therefore one faces less problems with OSS. http://www.pcworld.com/article/209891/10_reasons_open_source_is_good_for_business.html
Finally, Policymakers are also very aware of the importance of Open innovation with respect to citizens. For example, the European Union founded the Open innovation Strategy and Policy Group (OISPG) some years ago. The goal of OISPG is to suggest various open innovation actions and approaches to industry and to other innovation partners in order to stimulate and strengthen competitiveness. The OISPG needs to be a project that co-creates the future and drives structural changes far beyond the scope of what any one organization or person could do alone. http://ec.europa.eu/digital-agenda/en/open-innovation-strategy-and-policy-group (2/06/2015). Furthermore the European Commission says that Open Innovation is great way to find better solutions in healthcare, transportation, climate change, youth unemployment, financial stability, prosperity, sustainability and growth. The open innovation 2.0 project of OISPG is based on the Quadruple Helix Model. This model brings business, academia, government sectors and civil society to make them drive changes far beyond the scope of what any other organization can do on their own. Anyway, this project seems still far away of what Ghandi said.
Conclusion: Open innovation is beneficial for different entities. It has a lot of advantages for several types of companies, less for others. Since some years the European Union embraced also open innovation.
Sources:
http://ec.europa.eu/digital-agenda/en/open-innovation-strategy-and-policy-group
http://www.pcworld.com/article/209891/10_reasons_open_source_is_good_for_business.html
http://www.ipdigit.eu/2015/06/opening-up-knowledge-management/)
http://implementconsultinggroup.com/media/289053/a-guide-to-%E2%80%9Cefficient-open-innovation%E2%80%9D.pdf
http://creativecommons.org/about
2010, Belleflamme P. & Peitz M., Industrial organization “Markets and Strategies, page 535
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Open-Source initiatives become more and more common. This is especially true among IT companies and their R&D processes.
While it is hard to deny that “open” knowledge has lots and lots of positive (side-) effects, there is a substantial amount of drawbacks that one must consider when approaching the problem.
A simple example is the sometimes huge extra costs an IT company faces when it is considering Open-Source as its licensing standard. Indeed, even if the global idea and initiative serves the purpose of the end-user and the competitors, when the code is open-source, it is supposed to reflect the company’s ability. As such, extra care must be taken when writing software as it will be directly available to everyone. (1)
When facing a wide-spread use, open-source projects and ideas tend to be superior to privately-owned ones. This is, once again, mostly true in the industry of computer science and its use in enterprise infrastructures. It is a field in which no proprietary and/or closed-source solution has been able to successfully emerge.
The main point of this comment is to outline the fact that the benefits of Open-Source licensing isn’t a black-or-white issue. In most cases, the benefits of such a system will depend on the final intended user and on the timing governing the release of knowledge.
1) http://readwrite.com/2014/07/07/open-source-software-pros-cons
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The main goal of IP rights is not the same as before anymore. Earlier, IP rights helped to protect creations of the mind. Now, the idea is to share those creations through IP rights. Indeed, knowledge management is fostered thanks to three new forms of knowledges exchanges: cross-licensing agreements, open-source licensing patterns and collaborative bodies (standard setting organizations).
We can ask ourselves why patents holders would voluntarily made their technologies and ideas available for everyone. Why didn’t they use IP rights to protect their technologies instead of sharing it?
Let’s take the example of cross-licensing agreements. They are used to allow firms to have access to each other’s IP rights portfolio. In fact, these agreements facilitate the process of innovation since it results in a cumulative process. Combining complementary assets can fully develop the potential of firms and brainstormings between firms can help ideas to emerge more easily. Moreover, cross-licensing agreements help reducing the risk of costly court battles. That’s a first reply to the questions.
Secondly, climate changes have inspired the adoption of those patterns. The gathering of existing innovation with royalty-free access such as Eco-Patent Commons and other green open-source initiatives helped to support sustainable development. Some firms like Tesla share this open-source philosophy for the protection of the environment.
The second issue concerns the consumers and their welfare. Will they benefit of these new forms of IP rights? Let’s take the example of standard setting organizations (SSO). In fact, their goal is to promote technical standards through the open licensing (but with the payment of license fees) of the required IP rights. Since they facilitate the comparability & interoperability between firms ‘products, it increases competition among the industry. Therefore, it helps consumer welfare to rise because competition lowers the price. Moreover, standardized wireless technologies and MOOC (an open-source licensing pattern) are two examples of innovations that can help consumers in their day-to-day life. Without the first, they wouldn’t have devices with wireless technologies that work everywhere, so no compatible products. Without the second, people who have difficulties to go to the courses location wouldn’t be able to follow them. So, the general answer of the question is yes.
Finally, I would say that these new IP rights contribute to a win-win situation. Both firms and consumers take advantages of developing an open approach to IP rights.
Sources:
http://creativecommons.org/about
http://www.ipdigit.eu/2011/04/le-brevet-est-il-soluble-dans-les-modeles-ouverts/
http://www.ipdigit.eu/2013/04/will-we-all-soon-be-hooked-on-moocs-1-introduction/
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It is very understandable that firms want to protect their IP rights, they want to make profit and they want a return on their investment and the effort they put into their creation.
However, as numerous examples show openness in knowledge management benefits society. Therefore, it is imperative for firms to recognize the greater good of sharing their inventions and allowing them to inspire other innovators.
For example, the case with Tesla mentioned in the article clearly shows the founder recognizing the limitations of the company and understanding the value of sharing his invention. (http://www.teslamotors.com/blog/all-our-patent-are-belong-you)
Another point that I would like to emphasize is that innovation in a technological sense is hardly ever conceived from nothing. It usually starts with an existing product that is advanced by the innovation. So, it is extremely important for technology, knowledge to be shared, so that future advances can be built upon in a timely fashion.
For instance, the aim of the Accessibility Project is to make the impossible a reality for people suffering from a range of impairments, by helping websites customize the online service they offer so that it caters to the needs of these people as well.
Everyone has encountered a website at one point in their life that was incomprehensible to them and only served to frustrate them. Imagine this being not an odd accident but a daily occurrence, imagine being unable to access the information you need, that is the battle that The Accessibility Project tries to tackle. (http://a11yproject.com)
The fact is that an enormous amount of knowledge is accessible to people more so than ever in human history and compatibility plays a major role. For example, when you download the kindle app, you’re able to do so on your mobile device, or tablet, laptop, even on a desktop, regardless of the brand of the device or the operating system you use. Without compatibility you would need a Kindle device to reap the benefits of the application. I’d like to go further into this example and expand on the content the app offers. Did you know that you can get classic titles like ‘The Great Gatsby’, ‘Jane Eyre’, ‘A Tale of Two Cities’ for free on the app? In this way the work of these renowned authors is likely to reach a larger audience.
Twenty years ago if you wanted to read a book, you had to go to a library to borrow it or to a bookstore to purchase it. Today you click on a link, and there it is – right underneath your fingertips. And this trend of sharing knowledge is increasing, and spreading through university campuses.
To conclude, compatibility through devices of different brands can only be guaranteed by sharing knowledge. That also prevents a firm from forcing consumers to buy accessory products only from their own brand, and assuring firms abide by competitive policy laws. Sharing how-to knowledge helps advancement and ensures social welfare. So, next time companies should consider sharing, as the examples above illustrated that it’s for the greater good.
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As explained in the article, recently, it exists a wider view of the IP than years ago, which I find very enriching for the development of the technologies and inventions. The existence of collaborative IP initiatives is really interesting since many ideas can come out from many different people and they all create something that at the end it is useful and innovative.
As we saw in the last week article about patent trolls, open innovation is becoming something good, which allows innovation to improve from previous inventions.
Other companies that use open innovation besides the ones mentioned in the article are Coca Cola, who has an Accelerator Program, Microsoft who gathers entrepreneurs together and they can share their knowledge under the organization “Microsoft Ventures” and Google who also has an entrepreneur program.
One example about open innovation using cross-licensing agreements is the Cisco-Blackberry case, that came out recently (June 2015), where Blackberry would receive a license fee from Cisco.
But open innovation is not only for big companies, also small companies such as start-ups can benefit from the use of open innovation. Small companies seize the external partners to innovate due to the lack of internal resources.
In my opinion, open innovation is a very important way to share knowledge and to be able to get the best from each part to obtain an innovation.
Sources:
1. http://www.innovationexcellence.com/blog/2014/08/13/15-examples-of-open-innovation-between-big-companies-startups/
2. http://press.blackberry.com/press/2015/BlackBerry_and_Cisco_Sign_Broad_Patent_Cross-Licensing_Agreement.html
3. http://www.innovationmanagement.se/imtool-articles/open-innovation-for-small-companies/
4. http://www.flandersdc.be/en/study/open-innovation-smes-how-can-small-companies-and-start-ups-benefit-open-innovation-strategies
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In today’s world, there is one thing we know for sure : Things are going fast. So fast that it is increasingly hard for the companies to stay up to date. Especially within the compagnies based on technologies and electronic devices but also for all the others companies who are forced to use these technologies in order to stay in our time and stay competitive. Trying to innovate using only their own knowledge is, in my opinion, really dangerous for any compagnies. Because nowadays, they are facing the major risk that this knowledge will soon become obsolete (1&2) and they are more likely to fail producing enough knowledge to replace it. In this matter, I particularly like this quote from Samuel Arbesman : « It turns out knowledge is a lot like radioactive atoms because it decays over time. » (3). Technologies are evolving so fast that everything you know could be obsolete from one day to the next. So, in my opinion, opening up to knowledge sharing is not only the smarter way to develop new products and to make some extra profit but it is more importantly the safest way, for compagnies, to stay competitive and alive. An other reason, as it is well said in the article above, is that we are living in a interconnected world. You have to adopt some standards and adapt your product to this standards. Because it is most likely that you want to touch most of people in order to make them your consumers. It is no use for a company to develop something new and innovative that can not be used by anyone. So knowledge sharing is, in that matter, kind of mandatory. It is in everybody’s interest, consumer’s and companies’s, to share some knowledge and no patent everything. Or, at least, not suing everybody or asking an enormous fees to use the technology protected by the patent. Sharing knowledge can also reduce companies’s research and development, help them to make new with old easily… The benefits are endless. Of course, it is an utopia to think that sharing everything will make the world better. There is an obvious risk of free ride. But I think that is in the compagnies’s best interests to agreed on sharing some of their knowledge like Google and Verizon. The main challenge for such exchanges is to find an equitable, fair agreement between the parties.
(1) http://www.gurteen.com/gurteen/gurteen.nsf/id/ksculture
(2) http://blog.codinghorror.com/everything-you-know-will-be-obsolete-in-five-years/
(3) https://hbr.org/2012/11/be-forewarned-your-knowledge-i
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By easing comparability and interoperability standard setting organisations can lessen barriers to enter, increase competition, diminish costs and carbon footprint (With devices that can be used for several purposes). All of those consequences leads to heighten the consumer’s welfare. (http://www.dwt.com/Standard-Setting-Organizations-can-be-Risky-Business-for-their-Members-02-06-2013/)
But leading firms can sometimes harm other competitors by using SSO for their own and only interest. We can refer to the exemple between members form the telecommunication collaborative body 3GPP. In deed, one of its members, TruePosition “accuses the defendants (ed: LM Ericsson Telephone, Alcatel-Lucent USA and Qualcomm) of blocking the adoption of TruePosition’s already existing and broadly deployed technologies into the new standards for LTE, while at the same time ensuring that their own unproven technologies were included in the new standards.” (http://www.trueposition.com/about-trueposition/news/press-releases/judge-denies-motion-to-dismiss-trueposition-s-antitrust-lawsuit-against-ericsson-alcatel-lucent-qualcomm-and-standard-setting-organization/)
Although the court “dismissed that version of the complait in January 2012, they invited the plaintiff to refile with more specific allegation of an antitrust conspiracy” (http://www.trueposition.com/about-trueposition/news/press-releases/judge-denies-motion-to-dismiss-trueposition-s-antitrust-lawsuit-against-ericsson-alcatel-lucent-qualcomm-and-standard-setting-organization/)
To conclude, this exemple shows that even if SOOs lead to a lot of good consequences, firms should always make sure that they won’t be left back when new standards are established.
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Sharing knowledge is now an indispensable tool for the dynamics of social interactions within a company as well as a better rate of innovation. To make this sharing optimal, it is crucial that the company is on the implementation of this revolutionary tool. Indeed, it must be equitable sharing; we must not give without receiving, or vice versa receive without giving.
This new tool present in many business is quite new for the simple reason that knowledge sharing is only possible by information technology and network. This new technology, the networking, allows a better performance and a better degree of innovation of the company by an employee knowledge enrichment through modern technology.
The open innovation is a concept that allows to make discoveries through the sharing of knowledge we introduced above. This concept has many advantages, such as reducing the financial investment in the R&D department, and the development of joint projects. It is indeed by several brainstorming that ideas emerge quickly. As stated in the article “Opening up knowledge management”, technological advance is the result of a cumulative process.
Most innovations depend on old discoveries. Indeed, an innovation from a few years can inspire new researchers to use it differently. A good example is the 3D printing. It was invented almost 30 years ago to create 3D objects especially for the industrial sector. But some researchers in medicine realized that it could be very useful for health. And today, we are working on bioprinting that is able to create 3D human tissues, and soon we can create organs in 3D.
That is to say that innovation can always be developed differently, by other people, to create another revolutionary innovation based on an innovation already well established in our society.
As explained in the article, there are several ways to promote the sharing of knowledge, sometimes leading to breakthrough discoveries.
I think that knowledge sharing is a major advance in the field of innovation because it allows significant savings for research and a major time saver. Indeed, people work faster together, and it allows to avoid working on the same thing in two places. The open innovation makes it possible to move faster with less expense and less effort.
But it must of course be specific about the income of the various parties involved in the project for none of them was damaged.
References :
http://www.memoireonline.com/04/12/5680/m_Etude-de-communautes-de-pratique-et-mecanismes-de-partage-des-connaissances-via-les-reseaux-nume29.html
http://www.idexlab.com/blog/fr/tag/innovation-collaborative
https://www.google.be/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB4QFjAAahUKEwiZutHnid7IAhWIOBQKHRo6DxM&url=http%3A%2F%2Fwww.eurasante.com%2Fwp-content%2Fuploads%2F2014%2F01%2Fbio-sante-30.pdf&usg=AFQjCNGGhh3wTIgH2NbkbnUr1tjHxpnuNQ&sig2=2KuEwJ1WZotRbfo1mkWBug&bvm=bv.105841590,d.d24
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My view on opening up knowledge management is that it is positive for the consumer and for companies as well, especially when (almost or absolutely) free or charge. It is wise to give access to knowledge resources, IP (Intellectual Property), this open approach allows innovation to be incremental without problems due to IP, like patent claims for example.
Reading this article allowed me to identify different types of “sharing” knowledge covered. There are private-oriented forms of sharing, private-public-oriented types of sharing and open source forms of sharing.
I identified a private-oriented form of knowledge management where IP is shared, but within a pool of private companies.
Cross-licensing agreements, pooling IP rights on participating companies’ portfolio’s, foster innovation while inhibiting the risk of court battles.
For the private-public-oriented types of knowledge management, I identified organizations (schools or universities) or (private) companies aiming to share information with the general public. The knowledge comes from these organizations which gives access to it to anyone.
Open-educational resources, MIT, MOOC (edX.org) and others.
Tesla chose not to sue anyone using its patented technologies as long as they are used in good faith. This idea is novel to me, and makes me wonder how Tesla defines “good faith”, if it really is measurable. In the case it is not, there might be a judgmental variable in Tesla’s decision to sue or not to sue a company using its patented technologies. Tesla must be careful to clearly define these terms to avoid unfairness and potential disputes between companies who were granted the right to use Tesla’s IT and those who were not. The reason why Tesla is allowing this is noble, the company wants carbon emissions to be reduced asap and knows it is not in measure to do so fast enough, therefore renouncing royalties or fees it has the right to.
Open innovations from standard setting organizations have a standardizing goal in mind, which is practical. Micro-USB chargers are a standard in the small devices’ industry, they are used to charge smartphones, GPS’s, etc. In interests of fairness, patent holders of a standardized technology should be required to license their IP rights under FRAND (fair, reasonable and non-discriminatory) conditions, which need to be clearly defined. According to this blog post, licensing under FRAND conditions, whether well-defined or not, is not required by all the standard setting organizations… yet? For the end consumer, FRAND conditions may be the best way to reduce costs.
In contrast to the two forms of sharing identified above, open-source sharing is available to everyone, free of charge, for software, environment-friendly patents, and creativity.
We have open source for software, developed by contributors from all over the world, like Mozilla Firefox, Linux, and so forth.
We also find environment-friendly open source licensing patents. Two organizations provide such a platform.
Eco-patent commons “provides a unique opportunity for business to share innovation that can foster sustainable development. It was designed to facilitate the use of existing innovation that is protective of the environment, and encourage collaboration for new innovation through an online collection of environmentally beneficial patents pledged by the member companies for free use by anyone.” (http://ecopatentcommons.org/ ). Green Open-source initiative.
IBM, Nokia, Sony and Pitney Bowes also opened an “eco-patent commons”, on the following website: http://www.wbcsd.org/web/epc (http://satellite.tmcnet.com/news/2008/01/25/3231039.htm).
The last open-source sharing are the Creative Commons (CC) licenses. Creative Commons is a nonprofit organization that “develops, supports, and stewards legal and technical infrastructure that maximizes digital creativity, sharing, and innovation”, in short, it “enables the sharing and use of creativity and knowledge through free legal tools.” CC’s “are not an alternative to copyright. They work alongside the copyright.” It changes the copyrights perspective of “all right reserved” to “some rights reserved”. This means you can choose under which conditions you give people the right to share, use or even build upon a work you created, and protects these people of copyright infringement when abiding by the specified conditions (Creative Commons Website mentioned above) (http://creativecommons.org/about ).
As an end consumer, I think it is important that some companies owning patents share them. That is what the USB stick inventor did; the underlying patents are owned by Intel. The company chose to maintain the technology open from royalties, a decision that contributed to the success of the technology (http://datanews.levif.be/ict/actualite/l-usb-n-a-rien-rapporte-a-son-inventeur/article-normal-437607.html ). Furthermore, being a student and using as many resources as possible to better understand some courses, initiatives like the MOOCs (on edX.org) are a really helpful tool to have other views on some subjects.
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On the one hand, we see companies like Tesla opening up their R&D work to the world as it scales up and invests them to buy into the electric market movement. On the other, we see companies like Apple push the barrier of innovation and in the process, create more differentiated elements that differ from the standard – for instance, Apple chargers for Macbooks and iPhones are incompatible with those of any other brand. In this context, we need to look at when open source is a useful business decision and when it is not.
In cases where the technology is a core competency of the organization, it would be fair to assume that these will be confidential and not shared with the rest of the world. It might even qualify for trade secret protection. However, if the benefit of sharing the information is of value to stakeholders, especially those that are traditionally under-represented, we can see that open source might be the more applicable option, even if it flies in the face of conventional logic. For instance, with green technology, the benefits accrue to the entire world, and not just the local market, suggesting that causes with a strong sense of purpose resonate across borders.
However, if technology were not as important to the firm, then sharing the information might lead to smaller companies innovating and providing solutions to improve the efficiency of these functions. For instance, big companies may not have the bandwidth to innovate on improvements in adapter technology, but small firms might be able to design an adapter that is high-charge on electricity, and low on price.
Based on this, we can conclude that open source, like its software counterpart, is best used for certain purposes and avoided for others.
References
http://www.pcworld.com/article/209891/10_reasons_open_source_is_good_for_business.html
[2] http://press.blackberry.com/press/2015/BlackBerry_and_Cisco_Sign_Broad_Patent_Cross-Licensing_Agreement.html
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