Patents in the Information and Communications Technology Sector - Development Trends, Problem Areas and Pressures for Change

The patent system was created for the purpose of promoting innovation by granting the inventors a legally defined right to exclude others in return for public disclosure. Today, patents are being applied and granted in greater numbers than ever, particularly in new areas such as biotechnology and information andcommunications technology (ICT), in which research and development (R&D) investments are also high. At the same time, the patent system has been heavily criticized. It has been claimed that it discourages rather than encourages the introduction of new products and processes, particularly in areas that develop quickly, lack one-product-one-patent correlation, and in which theemergence of patent thickets is characteristic. A further concern, which is particularly acute in the U.S., is the granting of so-called 'bad patents', i.e. patents that do not factually fulfil the patentability criteria. From the perspective of technology-intensive companies, patents could,irrespective of the above, be described as the most significant intellectual property right (IPR), having the potential of being used to protect products and processes from imitation, to limit competitors' freedom-to-operate, to provide such freedom to the company in question, and to exchange ideas with others. In fact, patents define the boundaries of ownership in relation to certain technologies. They may be sold or licensed on their ownor they may be components of all sorts of technology acquisition and licensing arrangements. Moreover, with the possibility of patenting business-method inventions in the U.S., patents are becoming increasingly important for companies basing their businesses on services. The value of patents is dependent on the value of the invention it claims, and how it is commercialized. Thus, most of them are worth very little, and most inventions are not worth patenting: it may be possible to protect them in other ways, and the costs of protection may exceed the benefits. Moreover, instead of making all inventions proprietary and seeking to appropriate as highreturns on investments as possible through patent enforcement, it is sometimes better to allow some of them to be disseminated freely in order to maximize market penetration. In fact, the ideology of openness is well established in the software sector, which has been the breeding ground for the open-source movement, for instance. Furthermore, industries, such as ICT, that benefit from network effects do not shun the idea of setting open standards or opening up their proprietary interfaces to allow everyone todesign products and services that are interoperable with theirs. The problem is that even though patents do not, strictly speaking, prevent access to protected technologies, they have the potential of doing so, and conflicts of interest are not rare. The primary aim of this dissertation is to increase understanding of the dynamics and controversies of the U.S. and European patent systems, with the focus on the ICT sector. The study consists of three parts. The first part introduces the research topic and the overall results of the dissertation. The second part comprises a publication in which academic, political, legal and business developments that concern software and business-method patents are investigated, and contentiousareas are identified. The third part examines the problems with patents and open standards both of which carry significant economic weight inthe ICT sector. Here, the focus is on so-called submarine patents, i.e. patentsthat remain unnoticed during the standardization process and then emerge after the standard has been set. The factors that contribute to the problems are documented and the practical and juridical options for alleviating them are assessed. In total, the dissertation provides a good overview of the challenges and pressures for change the patent system is facing,and of how these challenges are reflected in standard setting.

Tietokoneohjelmien suojaaminen ja ohjelmien samankaltaisuuksien aiheuttamat oikeudelliset ongelmat

Tietokoneohjelmaa suojataan tekijänoikeudella, liikesalaisuussuojalla ja patentilla. Jotta ohjelmistoalan yritys pärjäisi dynaamisilla ja kansainvälisillä ohjelmistomarkkinoilla sen pitää patentoida ohjelmansa sekä hyödyntää ja puolustaa patenttejaan. Ohjelmistopatentteja myönnetään myös Euroopassa yhä enemmän. Ohjelmistoteollisuudessa tuotekehitys perustuu usein jo olemassa olevalle, josta aiheutuu alalle tyypillistä teknologioiden päällekkäisyyttä. Jotta yritys pystyisi toimimaan tietyllä markkina-alueella, se saattaa tarvita sellaista teknologiaa joka on jo jonkun patentoimaa. Edellä mainituista syistä sekä ohjelmistopatenttien samanlaisuuksista ja patenttien suuresta määrästä johtuen patentinloukkauksia tapahtuu ja niihin tulee reagoida liikesuhteet huomioon ottaen, esimerkiksi neuvottelemalla liiketoimintasopimuksesta, sovittelemalla konfliktia sovittelumenettelyssä ja tarvittaessa oikeudellisin keinoin.

Desmistificando a proteção por patentes nas universidades

Brazilian universities and research institutions still fail to protect the knowledge and technology produced by their community of students, staff and professors while Intellectual Property (IP) issues along with the role of patents and their strategic management in educational and research institutions remain taboo or misunderstood. The focus of this work was to demystify these subjects, including IP, patents and their requirements, the decision to patent as well as tips for successful patenting. Any student, professor or researcher of an educational or research institution can invent and protect their technology. This paper shows how to make such a patent application.

Tech Frame: Integrative work project in strategy

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

The patent expiry as a major inflection point in a branded Rx drug's life and strategies to counter generic competition - exemplified at Pfizer's blockbuster drug Lipitor in the USA

A large number of expensive, but highly profitable branded prescription drugs will go off-patent in the USA between 2011 and 2015. Their revenues are crucial to fund the immense costs associated with the development of an innovative drug. The rising cost pressure on pharmaceutical stakeholders has increased the demand for more affordable medications, as provided by the branded drug's generic counterpart. Yet, research based incumbents are moving beyond the traditional late lifecycle strategies and deploy more aggressive tactics in order to protect their brands, as seen with Pfizer's Lipitor!. It is doubtful, whether these efforts will help the blockbuster business model to resist current market conditions.

Renal transplantation following aorto-iliac reconstruction is a safe a strategy

Introduction: Renal transplantation is considered the treatment of choice for end-stage renal disease. However, the association of occlusive aorto-iliac disease and chronic renal failure is frequent and aorto-iliac reconstruction may be necessary prior to renal transplantation. This retrospective study reviews the results of this operative strategy.Material and Methods: Between January 2001 and June 2010, 309 patients underwent renal transplantation at our institution and 8 patients had prior aorto-iliac reconstruction using prosthetic material. There were 6 men and 2 women with a median age of 62 years (range 51-70). Five aorto-bifemoral and 2 aorto-bi-iliac bypasses were performed for stage II (n=5), stage IV (n=1) and aortic aneurysm (n=1). In one patient, iliac kissing stents and an ilio-femoral bypass were implanted. 4 cadaveric and 4 living donor renal transplantations were performed with an interval of 2 months to 10 years after revascularization.The results were analysed with respect of graft and patients survival. Differences between groups were tested by the log rank method.Results: No complications and no death occurred in the post-operative period. All bypasses remained patent during follow-up. The median time of post transplantation follow-up was 46 months for all patients and 27 months for patients with prior revascularization. In the revascularized group and control group, the graft and patient survival at 1 year were respectively 100%/96%, 100%/99% and at 5 years 86%/86%, 86%/94%, without significant differences between both groups.Discussion: Our results suggest that renal transplantation following prior aorto-iliac revascularisation with prosthetic material is safe and effective. Patients with end-stage renal disease and concomitant aorto-iliac disease should therefore be considered for renal transplantation. However, caution in the interpretation of the results is indicated due to the small sample size of our study.

Innovation or Imitation? The effect of spillovers and competitive pressure on firms' R&D strategy choice

This article provides a theoretical and empirical analysis of a firm's optimal R&D strategy choice. In this paper a firm's R&D strategy is assumed to be endogenous and allowed to depend on both internal firms. characteristics and external factors. Firms choose between two strategies, either they engage in R&D or abstain from own R&D and imitate the outcomes of innovators. In the theoretical model this yields three types of equilibria in which either all firms innovate, some firms innovate and others imitate, or no firm innovates. Firms'equilibrium strategies crucially depend on external factors. We find that the efficiency of intellectual property rights protection positively affects firms'incentives to engage in R&D, while competitive pressure has a negative effect. In addition, smaller firms are found to be more likely to become imitators when the product is homogeneous and the level of spillovers is high. These results are supported by empirical evidence for German .rms from manufacturing and services sectors. Regarding social welfare our results indicate that strengthening intellectual property protection can have an ambiguous effect. In markets characterized by a high rate of innovation a reduction of intellectual property rights protection can discourage innovative performance substantially. However, a reduction of patent protection can also increase social welfare because it may induce imitation. This indicates that policy issues such as the optimal length and breadth of patent protection cannot be resolved without taking into account specific market and firm characteristics. Journal of Economic Literature Classification Numbers: C35, D43, L13, L22, O31. Keywords: Innovation; imitation; spillovers; product differentiation; market competition; intellectual property rights protection.

Differences in the patent management in Brazilian companies with and without plants abroad

This paper compares the procedures of local Brazilian companies (those which have plants in Brazil only) with those of international Brazilian companies (which have plants in at least two countries) regarding the patent management. Although there are a lot more variables to consider when examining the issue of patents in companies, this study presents and analyzes the results of a qualitative research on the decision to patent innovations, the choice of countries where to patent and the strategic significance of patents to the company.

Systematic surgical closure of patent foramen ovale in selected patients with cerebrovascular events due to paradoxical embolism. Early results of a preliminary study.

OBJECTIVE: To define therapeutic strategy for management of patients with ischemic stroke due to a high probability of paradoxical embolism through a Patent Foramen Ovale (PFO). METHODS: Since 1988 all consecutive patients with cerebrovascular events and PFO from the Stroke Registry of our population-based primary-care center are prospectively studied and followed. Since 1992, among 118 patients with cryptogenic embolic brain infarct or transient ischemic attack (TIA) and PFO, 32 consecutive patients younger than 60 years who presented at least two of the following criteria were admitted for surgery: history of Valsalva strain before stroke (11); multiple clinical events (13); multiple infarcts on brain Magnetic Resonance Imaging (MRI) (15); atrial septal aneurysm (ASA) (16); large right-to-left shunt (> 50 microbubbles) (12). RESULTS: Operative time 135' +/- 33'. CPB time 34' +/- 14'. Aortic crossclamping time 16' +/- 6'. Post-operative bleeding 485 +/- 170 ml. No homologous blood transfusion required. No neurological, cardiac or renal complications. All patients were followed-up corresponding to a cumulative time of 601 patient-months. This revealed no recurrent vascular events nor silent new brain lesions on brain MRI. Systematic simultaneous contrast Trans Esophageal Echocardiography (TEE)-Trans Cranial Doppler showed a small residual interatrial shunt in two patients. CONCLUSION: Surgical closure of a patent foramen ovale can be accomplished with very low morbidity and reduce efficiently the risk of stroke recurrence. It seems to be the option of choice in selected patients with a higher (> 1.5%/year) risk of stroke recurrence.

A strategy for obtaining social benefits from the gene revolution

The strategy described in the present paper offers details about the possibility for Brazil to play a more substantial role in the gene revolution. If successfully applied, the powerful science-based technology currently available in Brazil can contribute to extend the benefits of the gene revolution to the poorest countries, very much like the Green Revolution did in the past, thereby reducing the hunger syndrome which claimed the lives of millions of people in some Asian countries, particularly Pakistan and India, decades ago. In his visit to Brazil in February 2004, Norman Borlaug had the opportunity to witness the success of Brazilian agriculture. At a Conference held at ESALQ - Superior School of Agriculture Luiz de Queiroz in Piracicaba, SP, Brazil, he stated that the 21st century revolution will come from Brazil in the area of agriculture. He also said that reducing hunger is essential for the world to achieve socioeconomic stability. A central question remains unanswered: who will fund this revolution? The FAO 2003-2004 Annual Report listed the barriers preventing the gene revolution from reaching the poorest countries: inadequate regulatory procedures - Intellectual Property Rights and Biosafety, poorly functioning seed delivering systems and weak domestic plant breeding capacity; all are discussed in this paper.

Fuzzy real option analysis in patent related decision making and patent valuation

The shift towards a knowledge-based economy has inevitably prompted the evolution of patent exploitation. Nowadays, patent is more than just a prevention tool for a company to block its competitors from developing rival technologies, but lies at the very heart of its strategy for value creation and is therefore strategically exploited for economic pro t and competitive advantage. Along with the evolution of patent exploitation, the demand for reliable and systematic patent valuation has also reached an unprecedented level. However, most of the quantitative approaches in use to assess patent could arguably fall into four categories and they are based solely on the conventional discounted cash flow analysis, whose usability and reliability in the context of patent valuation are greatly limited by five practical issues: the market illiquidity, the poor data availability, discriminatory cash-flow estimations, and its incapability to account for changing risk and managerial flexibility. This dissertation attempts to overcome these impeding barriers by rationalizing the use of two techniques, namely fuzzy set theory (aiming at the first three issues) and real option analysis (aiming at the last two). It commences with an investigation into the nature of the uncertainties inherent in patent cash flow estimation and claims that two levels of uncertainties must be properly accounted for. Further investigation reveals that both levels of uncertainties fall under the categorization of subjective uncertainty, which differs from objective uncertainty originating from inherent randomness in that uncertainties labelled as subjective are highly related to the behavioural aspects of decision making and are usually witnessed whenever human judgement, evaluation or reasoning is crucial to the system under consideration and there exists a lack of complete knowledge on its variables. Having clarified their nature, the application of fuzzy set theory in modelling patent-related uncertain quantities is effortlessly justified. The application of real option analysis to patent valuation is prompted by the fact that both patent application process and the subsequent patent exploitation (or commercialization) are subject to a wide range of decisions at multiple successive stages. In other words, both patent applicants and patentees are faced with a large variety of courses of action as to how their patent applications and granted patents can be managed. Since they have the right to run their projects actively, this flexibility has value and thus must be properly accounted for. Accordingly, an explicit identification of the types of managerial flexibility inherent in patent-related decision making problems and in patent valuation, and a discussion on how they could be interpreted in terms of real options are provided in this dissertation. Additionally, the use of the proposed techniques in practical applications is demonstrated by three fuzzy real option analysis based models. In particular, the pay-of method and the extended fuzzy Black-Scholes model are employed to investigate the profitability of a patent application project for a new process for the preparation of a gypsum-fibre composite and to justify the subsequent patent commercialization decision, respectively; a fuzzy binomial model is designed to reveal the economic potential of a patent licensing opportunity.

Pharmaceutical patent bargains: the Brazilian experience

In the backdrop of the strict patent regime flatly adopted by the World Trade Organization (WTO) for all countries, a few countries constantly challenge this system through aggressive patent bargains. Within the pharmaceutical sector, noticeably, some countries now threaten to issue or otherwise actually issue compulsory licenses that may sway large pharmaceutical companies into selling drugs with large discounts or into granting voluntary licenses domestically. That is conspicuously the negotiation strategy adopted by Brazil in its negotiations with big international pharmaceutical companies.This paper explains Brazil’s aggressive bargaining approach based on an analysis of two aspects of its political economy. The first has to do with the international context of patent bargaining in the post-WTO era. Accordingly, the existence of large and fast growing domestic markets position countries such as Brazil as strategic destinations for Foreign Direct Investment (FDI) and trade. Together with an absence of a propensity to innovate in pharmaceutical products, these conditions boost Brazil’s bargaining power for issuing compulsory licenses over pharmaceutical products. The second aspect is related to political economy dynamics inside Brazil. Accordingly, the political framework in Brazil undermines long-term policies and favors short-sighted ones also vis-a-vis R&D investments in the pharmaceutical industry. This remains true regardless of the strictness of the patent regime in place. The lesson of Brazil is relevant arguably for other more powerful developing countries which presently examine Brazil's approach while further challenging the WTO's strict patent policy for the future.

Technology acquisition through licensing. Implications for firm strategy

Nowadays licensing practices have increased in importance and relevance driving the widespread diffusion of markets for technologies. Firms are shifting from a tactical to a strategic attitude towards licensing, addressing both business and corporate level objectives. The Open Innovation Paradigm has been embraced. Firms rely more and more on collaboration and external sourcing of knowledge. This new model of innovation requires firms to leverage on external technologies to unlock the potential of firms’ internal innovative efforts. In this context, firms’ competitive advantage depends both on their ability to recognize available opportunities inside and outside their boundaries and on their readiness to exploit them in order to fuel their innovation process dynamically. Licensing is one of the ways available to firm to ripe the advantages associated to an open attitude in technology strategy. From the licensee’s point view this implies challenging the so-called not-invented-here syndrome, affecting the more traditional firms that emphasize the myth of internal research and development supremacy. This also entails understanding the so-called cognitive constraints affecting the perfect functioning of markets for technologies that are associated to the costs for the assimilation, integration and exploitation of external knowledge by recipient firms. My thesis aimed at shedding light on new interesting issues associated to in-licensing activities that have been neglected by the literature on licensing and markets for technologies. The reason for this gap is associated to the “perspective bias” affecting the works within this stream of research. With very few notable exceptions, they have been generally concerned with the investigation of the so-called licensing dilemma of the licensor – whether to license out or to internally exploit the in-house developed technologies, while neglecting the licensee’s perspective. In my opinion, this has left rooms for improving the understanding of the determinants and conditions affecting licensing-in practices. From the licensee’s viewpoint, the licensing strategy deals with the search, integration, assimilation, exploitation of external technologies. As such it lies at the very hearth of firm’s technology strategy. Improving our understanding of this strategy is thus required to assess the full implications of in-licensing decisions as they shape firms’ innovation patterns and technological capabilities evolution. It also allow for understanding the so-called cognitive constraints associated to the not-invented-here syndrome. In recognition of that, the aim of my work is to contribute to the theoretical and empirical literature explaining the determinants of the licensee’s behavior, by providing a comprehensive theoretical framework as well as ad-hoc conceptual tools to understand and overcome frictions and to ease the achievement of satisfactory technology transfer agreements in the marketplace. Aiming at this, I investigate licensing-in in three different fashions developed in three research papers. In the first work, I investigate the links between licensing and the patterns of firms’ technological search diversification according to the framework of references of the Search literature, Resource-based Theory and the theory of general purpose technologies. In the second paper - that continues where the first one left off – I analyze the new concept of learning-bylicensing, in terms of development of new knowledge inside the licensee firms (e.g. new patents) some years after the acquisition of the license, according to the Dynamic Capabilities perspective. Finally, in the third study, Ideal with the determinants of the remuneration structure of patent licenses (form and amount), and in particular on the role of the upfront fee from the licensee’s perspective. Aiming at this, I combine the insights of two theoretical approaches: agency and real options theory.

Patent foramen ovale and ventricular septal defect closure

Despite the growing recognition of the patent foramen ovale (PFO), particularly when associated with an atrial septal aneurysm, as risk factor for several disease manifestations (above all paradoxical embolism), the optimal treatment strategy for symptomatic patients remains controversial. Percutaneous PFO closure is a minimally invasive procedure which can be performed with high success and low morbidity. For secondary prevention of recurrent embolic events, it appears to be clinically at least as effective as oral anticoagulation. Ventricular septal defects (VSDs) are the most common congenital heart defects. Percutaneous VSD closure is more intricate than PFO closure. It is associated with a significant risk of both peri-interventional and mid-term complications. In suitable patients with congenital VSD, device closure may well be the preferred treatment both for muscular or perimembranous VSDs and for residual defects after surgical VSD closure. The risk of complete atrioventricular conduction block remains a concern in the perimembranous group. The history, technique and clinical role of percutaneous PFO and VSD closure are discussed, with emphasis on current problems and future developments.

Anticoagulant vs. antiplatelet therapy in patients with cryptogenic stroke and patent foramen ovale: an individual participant data meta-analysis.

AIMS The preferred antithrombotic strategy for secondary prevention in patients with cryptogenic stroke (CS) and patent foramen ovale (PFO) is unknown. We pooled multiple observational studies and used propensity score-based methods to estimate the comparative effectiveness of oral anticoagulation (OAC) compared with antiplatelet therapy (APT). METHODS AND RESULTS Individual participant data from 12 databases of medically treated patients with CS and PFO were analysed with Cox regression models, to estimate database-specific hazard ratios (HRs) comparing OAC with APT, for both the primary composite outcome [recurrent stroke, transient ischaemic attack (TIA), or death] and stroke alone. Propensity scores were applied via inverse probability of treatment weighting to control for confounding. We synthesized database-specific HRs using random-effects meta-analysis models. This analysis included 2385 (OAC = 804 and APT = 1581) patients with 227 composite endpoints (stroke/TIA/death). The difference between OAC and APT was not statistically significant for the primary composite outcome [adjusted HR = 0.76, 95% confidence interval (CI) 0.52-1.12] or for the secondary outcome of stroke alone (adjusted HR = 0.75, 95% CI 0.44-1.27). Results were consistent in analyses applying alternative weighting schemes, with the exception that OAC had a statistically significant beneficial effect on the composite outcome in analyses standardized to the patient population who actually received APT (adjusted HR = 0.64, 95% CI 0.42-0.99). Subgroup analyses did not detect statistically significant heterogeneity of treatment effects across clinically important patient groups. CONCLUSION We did not find a statistically significant difference comparing OAC with APT; our results justify randomized trials comparing different antithrombotic approaches in these patients.