Can Open Access coincide with Patent law?

Can Open Access principles coincide with Patents? I review a paper which says this just may be possible. As posted by me on SpicyIP.

[Warning: Long post that mostly reviews a paper describing a type of license which may reduce unnecessary patent litigation as well as promote an 'open access' approach. Actual review starts from below the dotted line. ]

Who would've thought patent-wars could have become a topic of discussion amongst even those with traditionally no interest in 'lawyery stuff'! Good or bad, one side effect that the Apple-Samsung fiasco has had, has been to turn the public's attention span towards the topic of patents. For example, the New York Times published a 7 page article online entitled "The Patent, Used as a Sword" that seems to be doing the rounds on the social network circles. Most of those 7 pages are in detailed instances of patents harming innovation. Just before that, The Atlantic even went to the extent of pulling out a 'legal' paper to review for their audience, in their article entitled, "The Case for Abolishing Patents". 

However, it's not just a few general public news sources that feel that patent laws have gone out of control. Indeed, quite a few academics and practitioners have been writing on this for years. Way back in the 1950s, Fritz Machlup, who had written 'An Economic Review of the Patent System', asserted to the US Congress that "If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, 

to recommend abolishing it." Unfortunately, since then, patent rights have only grown stronger, and of course the TRIPS Agreement was thrown in to make sure they don't go anywhere. And the various other "free trade" agreements are being signed, lobbied for, etc to harmonize these stronger rights. All this has led to several patent thickets  massive litigation expenses amongst other things, in turn leading to a diversion of resources from their optimal use - actual working of technology, and further innovation. 

At the same time, civil society and academics have been playing an increasingly active role in standing up for, and representing public interests. It is in this context that I will be reviewing a proposal that is discussed in Berkeley Professors Jason Shultz and Jennifer Urban's soon to be published paper entitled "Protecting Open Innovation: A New Approach to Patent Threats, Transaction Costs, and Tactical Disarmament". [I was lucky enough to have been part of a seminar in which an earlier version of this draft was presented and discussed]. Their proposal rides on the same spirit that the Creative Commons movement did in the Copyright arena and is certainly an interesting one, and is possibly a solution to at least the software patent issues, if not more sectors. 

----------------------------------------------------------------------------------------------------------------------------------

Their starting premise is similar to that of Machlup's, mentioned above. However, Shultz and Urban are trying to find a solution to the problems that Open Innovation Communities face by virtue of not taking the 'patent' path to do their innovation. We'll go with their term "Open Innovation Communities" (OICs), but I think they are really referring to any 'community/company/person' who is averse to a strongly pro-patent approach to innovation. But first - why do these communities choose to not take the patent path?Shultz and Urban identify three main reasons: 

a) The enormous resources required to acquire a useful patent portfolio. 

b) On principle. Many innovators, especially in the software field, view patents as unnecessary restrictions on the flow of information, and ones that help big corporates bully smaller innovators. There are also those who do not want to contribute to the mess that they feel the patent system has created already. 

c) There is nothing keeping a 'defensive' patent portfolio from being used offensively. 

This third reason, while being the basis for most of their paper, seems to be curiously phrased. Unless they are worried that their successors will use a portfolio gathered for defensive purposes, for offensive purposes later on, this doesn't seem to be that much of an incentive to stay away from the patent system. However, if there was a way to ensure that others use patents only defensively, there may be more of an incentive for innovators to engage more with the patent system. Such a system, wherein innovators are obliged to only use patent portfolios defensibly is in fact what Schultz and Urban go on to propose. 

[Defensive use of patents would mean to acquire patents only to defend themselves from lawsuits brought on them for infringement of someone else's patent, or from patent trolls.] 

Having identified these reasons, they flip them around to see the 'values' that might incentivise OICs. They are:

a) Collective benefit outweighs the collective costs (including fiscal, legal, information and transaction)

b) Cultural and political alignment with OIC values - ie, openness, and free-er flow of information, along with the view point that the dominant 'incentive' theory (exclusion rights are required to incentivise production) is not the only one present; and in fact the 'exclusion' approach comes in the way of their own preferred approach, be it motivation from benefit to reputation, importance of developing know-how, stimulating demand for a related product, etc. I.e., it disturbs their freedoms. 

c) When the 3rd condition is flipped around, it is seen that 'innovation conditions' which provide reliability and reduce risk of all participants are desired. (the most important criteria in my mind) 

In other words, a strategic 'patent' equivalent to the GNU General Public License and Creative Commons approach that exists in the 'copyright' field.  In their words, "By conditioning79 the license terms upon the licensee’s commitment to freedom and openness, copyleft OICs argue, they can ensure that as the network of users grows, new users enhance the value of the network through ongoing commitments to the same principles and norms. This both creates reliability by creating enforceable norms and limits gamesmanship." 

After extracting principles and values important to OICs, they take a look at the 4 existing patent defense strategies and the limitations that exist with them. Of these four, the first is of most interest, primarily because it fails due to a substantial failing of the patent system - information gathering.

Defensive Publication: While publishing information about OIC technology ideally should serve as prior art so that future patents aren't granted on this technology, in reality this doesn't work too well. This is because Patent offices need to be able to find this information, as well as that OICs engineers are generally the ones who put out the information and not in the same way that a lawyer would read or organize it. On top of that, patent attorneys can easily 'write around' prior art claims so that boolean  or linguistic searches do not throw up the same results.

The other three strategies include Patent Pledges, 'Peace' provisions and patent pools. A combination of vagueness, unreliability or insufficient incentives seem to limit these models and hence they go on to propose their own new innovative model - the Defensive Patent License.

"The DPL is a standardized open patent license designed to encourage the creation of a broad, decentralized network of OICs that both patent their innovations for committedly defensive purposes and license them on a royalty-free basis to any others who will do the same." With the objective of fulfilling the above three mentioned value based criteria, the DPL is offered with the following four conditions:

1. 1) Every DPL user (i.e. licensor or licensee) will forgo any offensive patent infringement actions against any other DPL user; 
2. 2) Subject to Condition 4, every DPL user will offer her entire current and future patent portfolio under the DPL;
3. 3) Every DPL user will bind any successor-in-interest to any part of her patent portfolio to her obligations under the DPL; and 
4. 4) If a DPL user wishes to stop offering her patents under the DPL, she may do so but only with six months’ notice to existing DPL users and future parties. She must continue to grant, and may not revoke, any licenses that are in place before the end of the notice period. Once she stops offering the DPL, other DPL users are free to revoke their licenses to her at will. 

If you take in the implications of these four conditions, you see that it is quite a simple, yet effective model. They go on to explain how such a model would better address the limitations that other defensive patenting techniques face while at the same time maintaining the values dear to the OICs. The basic information gathering issue is addressed by all DPL members having to register on a DPL website which would coordinate the members and their patents under the DPL. By pooling in their resources in this manner, their access to knowledge and technology increases by several factors, and their risk decreases at the same time.

While they have great points and certainly make a strong case for the initiation of such a model, I do have certain concerns regarding it.

a) It encourages patenting where patents would not otherwise be granted.

• This is described as an advantage of the system, but I'd rather frame it as an advantage to the system. More patents in the DPL pool help the DPL be more successful. But for companies to patent when they otherwise wouldn't, seems wasteful on it's own. Whether it would be wasteful in aggregate, would depend on the success of the DPL. And there may be a cyclic problem here, as little success = less patenting = little success. 
• By encouraging patents here, it removes incentives for patent-free innovation such as prizes, which may fall more squarely within OIC values. Having said that, it seems likely that OICs are more prevalent in certain sectors of technology such as software, computer based, mobile, etc. And the only major sector where 'prize systems' are still one of the few alternative innovation options are in the pharmaceutical world, where the the capital investments are simply too large to share freely. 

b) As noted by them, requiring an 'all-in' approach, would be problematic for many companies, especially the larger ones or ones that have a multi prong business approach with proprietary technology along with 'open' technology. They simply say that on consideration, an all in approach seems less harmful, than a partially in approach which may increase gamemanship (as companies may only put in less useful patents). However, they also leave open the possibility of allowing partial portfolios through means of specific technical standards, or some such objective criteria. The partially-in, based on objective/standardized criteria seems a much more 'business' friendly approach to me. 

All in all, it seems to be a very well thought out 'fightback' to the crazy patent wars, thickets and trolls that we have happening regularly now, especially in the software patent world. I wouldn't want to be the one in charge of maintaining the DPL website with such vasts amount of information on it, but that seems like a technicality that can be figured out along the way since the website itself does not do any 'enforcement'. The draft license is available in the index of their paper. You can also hear Shultz and Urban speak about it here. And for those of you who want to contribute or check over the language of the DPL, it's available for comments on their website here. 

IP as an innovation system

(For the meat of the post, you can scroll down to the 4th paragraph)

While there are many justifications and theories of intellectual property, I'll be approaching IPR from the perspective that regardless of the theories/justifications of IP, it is the primary method of incentivising innovation in our world today. (Having said that, this approach does more or less fall under the 'utilitarian theory'). I'll also be ignoring the politics of IP and the developed-developing country issues - the picture below pretty much sums that bit up. I've actually already done a bit of both of those approaches over here. I'm not even looking at the fallout effect of a badly managed but well intentioned patent regime such as excess litigation and overburdened patent offices. For the textual part of my post today, I'm simply looking at the basic concept of patents and copyrights today and explaining what I think their problems are. 

Personalized blog-art credit to Madiha Tallat 

Do feel free to stop and admire the cartoon above.

Ok, So moving on.
What are innovations? Simply put, they are gains in current information or knowledge which optimally can be implemented in products/processes and allow for the further production/discovery of more information or knowledge. Defined as such, innovations are naturally very valued in society and any reasonable society would try to formulate systems for improving the rate of innovative activity. Our society, reasonable or not, has also formulated some systems towards this goal and these are largely encompassed under the heading of 'Intellectual Property Rights'. 

It is obvious that the spread of information and knowledge is fundamental for society's growth and development, therefore any restriction placed on this spread should necessarily be a justified one. Conceptually, this is what patents and copyrights are. Temporary restrictions on the spread of information/knowledge present so as to provide the innovator a time period within which s/he can capture rents for the production of that information, thus serving as an incentive for innovators.

So on the one hand, these temporary restrictions price out one sector of consumers and restrict the flow of information while on the other hand, these restrictions may be the incentives required to quickly bring these innovations to light. The emphasised portions are the key trade-offs in this equation. It's clear what the negative is but on the benefit side, it may not be so clear as to why I'm emphasizing how 'quickly' the innovations are brought to light. The reason for this is that given a certain amount of information and knowledge, it is only a matter of time before an innovation is made from that information. There is no practical way of measuring how long/short this duration may be. Which means there is no practical way of knowing how much incentive is required to bring about an innovation earlier than it would have otherwise taken.

And this is what is causing many of the problems in the patent as well as copyright world today.

Even without actually examining why 20 years was eventually chosen as the standard patent term, it is clear that in the best case scenario it was a best-guess as to what the term ought to be. To add to that uncertainty, the advent of the internet has certainly made a tremendous impact on the spread and accessibility of knowledge and information. With the amount of information available to anyone who has access to a computer and internet connection, the spread of ideas is happening at a much quicker rate in nearly all fields, thus rendering the 'best-guess' of 20 years even more moot.

Unfortunately, discussion and debate in the actual policy setting has been far from transparent in the IP world, with normative solutions for society going lower and lower on the priority list.

Admittedly, patents and copyrights are two very different beasts and as such, I'll discuss them separately.
Copyrights tend to have a 'moral' edge to them, in that, they are more often the result of creative application of someone's mind. The idea remains free for others to use, while the person expressing the idea gets 'ownership' over his particular form of expressing that idea, so it's easy to see why people find it inherently easy to believe that copyrights are justified. This 'inherent justification' also partly explains how copyright terms have been pushed senselessly from 14 years to a currently possible 100+ years. Copyright mostly applies to 'culture' heavy sectors, so it's not very easy to even vaguely estimate if there has been any net benefit or loss due to copyright. However, the fact remains that copyrights can and have been exploited continuously. It's been a long while since our education has been through the means of stories passed on to us. The written word is how we learn and how we are taught now.  If knowledge is valued, then there must be more than a 'less than vague' estimate of net benefit to society by restricting it. Copious copyright term extensions also apply to academic publications. Recently the Spiegal wrote about a study by economic historian Eckhard Höffner, which says that Germany's current industrial might is a spillover effect of the proliferation of academic papers allowed by the absence of copyrights for about 130 years after the superpower of the time (Great Britain) instituted them. In pertinent part from the study:

"Publishers in England exploited their monopoly shamelessly. New discoveries were generally published in limited editions of at most 750 copies and sold at a price that often exceeded the weekly salary of an educated worker. London's most prominent publishers made very good money with this system, some driving around the city in gilt carriages. Their customers were the wealthy and the nobility, and their books regarded as pure luxury goods. In the few libraries that did exist, the valuable volumes were chained to the shelves to protect them from potential thieves.

In Germany during the same period, publishers had plagiarizers -- who could reprint each new publication and sell it cheaply without fear of punishment -- breathing down their necks. Successful publishers were the ones who took a sophisticated approach in reaction to these copycats and devised a form of publication still common today, issuing fancy editions for their wealthy customers and low-priced paperbacks for the masses."

"This created a book market very different from the one found in England. Bestsellers and academic works were introduced to the German public in large numbers and at extremely low prices. "So many thousands of people in the most hidden corners of Germany, who could not have thought of buying books due to the expensive prices, have put together, little by little, a small library of reprints," the historian Heinrich Bensen wrote enthusiastically at the time.

The prospect of a wide readership motivated scientists in particular to publish the results of their research. In Höffner's analysis, "a completely new form of imparting knowledge established itself."" 

Hoffner's is the first study to look at the effects of copyright over a long time and the fact the Britain and Germany existed with and without copyright respectively made it much easier to compare. This period free of copyright laid the foundation for Germany's rapid industrial expansion soon after. Certainly other factors were involved in their continued expansion but the industrial foundation as well as approach to scholarly literature was already set.

So coming back to my point - restricting the spread of knowledge certainly requires strong justifications and strengthening a system with weak foundations seems incongruent with that. I'm not quite advocating no copyright, but it does stand to reason that copyright restrictions should be as minimal as possible.


Products/processes which receive patents on the other hand are generally considered more 'hard' drivers of innovation. This is because they have more tangible benefits to society. Modern IP policy however, has curiously landed on 20 years as the duration of a patent for any and all sectors of technology. This implies that all sectors of technology require the same amount of incentives for innovation. This, however, is simply not true.

Common business sense and wanting first mover advantage is often a huge driver in innovation. Simply put, no one wants to be left behind. Sufficient competition will nearly always lead to innovation. The only normative reasons to give exclusion rights over products/processes are when (a) first mover advantage is likely or is viewed as likely to be insufficient to regain capital expenses and/or (b) when innovation is unlikely without extra incentive due to non-capital related reasons such as market stagnation or contradictory interests.

Pharmaceuticals are the best example of the first scenario where first mover advantage is insufficient to regain capital expenses due to the quick and cheaper reverse engineering that can be done to produce generic drugs. However, pharmaceutical patents come with a host of other problems, which require much explanation on their own and which I'm likely to be highlighting in future posts.
Battery technology is probably the best example of the sector specific innovation stagnation and this is probably due to the fact that improvement of battery capability leads to selling less batteries... But I really don't see how the patent system is helping this problem? If anything, it is part of the problem here. If the incentives to innovate it were tied to the social value of the better batteries rather than to it's sales revenues, there would likely be very quick development in the field.

Let's leave this reasoning aside and look at yet another problem. That of lack of contextualization. Different countries have different domestic strengths. International trade is based on comparative advantage, yet when it comes to patent rights, countries are not allowed to choose sectors for which they feel stronger or weaker patent protection is required.

In other words, despite different incentives required for innovation in different sectors, and despite different countries having different priorities and levels of development, patent policy is broadly the same world over.

The IP system can and will be argued over and teased and pulled in different directions by clashing interest groups... However in my eyes at least, it seems this is not a battle that can be won. Stakeholder interests by default will continue to clash with one another and often unfairly so, in each of their eyes. One way or another though, thanks to the WTO TRIPS Agreement, IP is here to stay. If alternative innovation systems do come up, they will have to somehow bypass the IP system and carve out their own niche.