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Predatory IP threatening the progress of open innovation

PARC celebrates 10 years anniversary with a warning

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The predatory use of intellectual property by companies and individuals is causing a serious impediment to the process of open innovation that is driving the latest changes in technology.

Henry Chesbrough, executive director of open innovation at UC Berkeley's Haas School of Business, said that the patents were originally relatively undervalued, since there was no court system set up to deal with them. But with the advent of specialized courts and legal practices around patents, the pendulum has swung too far the other way.

"It's sand in the gears of open innovation," he said. "You have people building entire businesses solely on patents they don't intend to practice."

"We need something in that space where we get enough protection that start-ups can get funding, capital investment can take place, people can experiment and get some value in the market if it works but not have somebody preemptively foreclose an entire market on the basis of something that is never practiced."

Proper use of IP was essential for companies that have moved away from the old closed R&D systems that used to drive large companies like Xerox and GE he said. Open innovation was built around sharing IP with other companies, some much smaller than people were used to.

In 1981 over 70 per cent of the world's R&D was done in companies of over 25,000 people, compared to just 4.4 per cent from companies with under a thousand employers. By 2007 the biggest companies were responsible for less than a quarter of all R&D dollars, while the smallest firms accounted for over a third of spending.

Chesbrough was speaking at the celebrations to mark 10 years of PARC as an individual company rather than as the research arm of Xerox, and the center's CEO Steve Hoover said the company was still at the heart of new technology research. ®

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