Sean Jauss
Mewburn Ellis

Aarhus University has launched a ‘patent free’ research zone. Mewburn Ellis’s Sean Jauss and Barney Dixon discuss its potential

What ‘barriers’ are there to research programmes that the removal of early stage patents, as Aarhus University has proposed, could solve? Are there other solutions?

The perceived barriers that removal of early stage patents could solve are principally legal and financial. That is, you are removing the cost and time required to:

Properly understand the intellectual property framework applying to the research project
Understand how best to maximise the IP outcomes
For the parties to address that understanding in a written contract

These barriers, when not described in the proper context or if poorly understood or incentivised, can be perceived as simply obstructing the conclusion of the research contract, receipt of the funding and the start of the research project.

In a university context, for example, the academic may principally be focused on securing funding for his or her laboratory and the people working there.

He or she will not necessarily be focused on downstream, perhaps less tangible, economic and legal outcomes.

It is also important to appreciate that IP is ‘wired’ into a great deal of academic-industry research. For example, the rules governing EU-funded Horizon 2020 projects give equal weight to public dissemination of the project results and to the legal protection of those results. It is not one or the other but a balance between the two that is sought.

The balance between the desire to protect IP (in order to support commercial innovation and future economic activity) on the one hand, and with the public interest served by dissemination of those results on the other, is a reasonable solution to the perceived barriers. To address the balance requires sophistication on the part of both the university and industry. And it is not always an equal balance. For example, there may be circumstances where the best solution for a research project is more in favour of the public interest, thus favouring an open-access solution.

Neither universities nor industry should be wedded to a single solution. Instead, they should be flexible and apply solutions that best address the industrial/commercial need and societal needs.

Would a patent free environment at the early stage of research promote innovation?

Not necessarily. Industry in particular values the potential afforded by patent rights, because they can create temporary exclusionary rights that provide a limited competitive advantage. Patent rights can, therefore, be a means to protect their investment in developing a novel technology from ‘free-riders’ by ensuring that the innovator benefits from a sufficient return to reward the risk taken in that development.

A good example for this argument is the pharmaceutical and biotechnology sectors, where very significant amounts of time and money are needed to be spent in developing novel medicines. Entering the market as a generic is much less expensive and risky. But unless someone takes the initial risk, then how will innovation occur? Different economic models can be imagined to overcome this risk bias—for example, government subsidising innovative research—but that such systems are not currently under contemplation and presumably would also be subject to some quid pro quo.

How can IP protection complement research? Can it hinder it?

IP protection can complement research. But it requires a certain degree of sophistication. That is, an understanding of the legal nature of the IP that can protect the innovation (in particular, its limitations) and how to best apply that IP to the research project and possible future applications. You also need to factor in the fact there research is inherently speculative and there is always a degree of uncertainty about future applications—in particular commercial and technical viability (can we make it cost effectively? Who will buy it?).

A good technology transfer team can balance out the needs of securing the research project with maximising the potential benefit to all the parties. But it is difficult. If you lack the necessary sophistication, or lack the necessary resources or incentives, then dealing with IP can become a hindrance because it complicates or slows down conclusion of the research project contract without any obvious upsides.

Could there be any other options to help avoid the legal complexity of IP protection? For example, alternative filing routes and subsidised applications for those in the academic sector?

IP offices regularly offer options designed to encourage or simplify filing for IP protection. For example, faster and/or cheaper examination for specific technology sectors and the Patent Prosecution Highway. Some countries, such as Germany and China, both use utility models—a type of simplified patent. Certain types of IP, such as EU registered designs rights, have a very simple and cheap application process which involves no examination. The UK office has trademark filing options that are specifically targeted at very small entities. The trick is for the IP user to understand what is on offer. IP offices could better publicise these offers to the lay audience and/or consult with users more regularly about options.

Governments could subsidise applications from the academic sector. But doing so might cause other problems. For example, it could potentially discriminate against small- and medium-sized entities, including those set up by universities to commercialise their IP. Specific subsidies or filing accelerations perhaps aimed at sectors targeted by government industry policy might be more beneficial and less discriminatory to classes of IP users.

Would a lack of IP rights hinder or promote third-party investment?

Lack of registered or registrable IP rights can hinder third-party investment, but it very much depends on the sector. Where a great deal of money and time needs to be spent on developing a technology, registered IP rights (such as patents) can help secure investment. For example, in the pharmaceutical or biotechnology sectors. Conversely, where securing registered IP rights is difficult and/or it is a very fast moving sector, for example, in computer software, then registered IP may not be as important in securing investment as realistic first-to-market business plans (bearing in mind that copyright, an unregistered IP right, may already provide some protection). Even in that case, however, registered trademarks will, eventually, be needed to secure the long-term value of those market opportunities.

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