Lecture 10 Flashcards

(65 cards)

1
Q

What is the definition of IP and what does it entail

A

IP refers to the output of a creative process

Entails:
Intellectual- product of the mind
Intangible asset- may be represented in physical form but it’s value is not limited by the physical form which it takes
Value is the fact that knowledge could further products or services
Treated the same way in law as tangible property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the rationale for IP

A

Claim of immediate position between tangible property and a free resource

IP creates and economic environment in which creative firms have sufficient incentives to undertake high risk inventions

IP should be treated as a property for only a short period of time but after this time, it should be treated as a common good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the two main methods for protecting IP

A

Institutional (formal)

Strategic (informal)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is institutional (formal)

A

Receive official recognition that the invention is the exclusive property of the inventor and it may not be used for commercial advantage by others

Must be a legislative organisation
If someone breaches they can be taken to court to protect

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is strategic (informal) IP protection

A

Keep the innovation secret, at least until the inventor is ready to commercialise or maybe longer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are patents

A

Gives a monopoly right for the commercial use of a product for a given period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What must be disclosed in a patent

A

Have to state who the precursors were

Must describe what is different and unique about your knowledge

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are some drawbacks of patents

A

Heavy cost to this and have to get patents in different markets
Long leborious and costly exercise
Need competent legal skills or you have to outsource again a a high cost
Typically large multinationals use patents
If patent is infringed upon you need resources to protect it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a copyright

A

Limits the right to copy a piece of IP
Area of increasing importance
Moving towards knowledge and services economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is a registered design

A

Given a monopoly right to use a particular design

Increasing in use
Ergonomics
Shape, visual looks e.g Coca Cola bottle

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a trademark

A

A distinctive sign, mark or logo which distinguishes the goods and services of one company from another
Increasingly an area to fight over

E.g Apple Corp v Apple computers
Cadbury trademarked their purple colour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is complexity

A

Used a new and highly complex process that is hard to copy

Tacit knowledge/ difficult to transfer to another person by means of writing it down or verbalising
Secrecy may be a good situation. Could keep it secret longer than a patent
Find alternative ways around if you disclose through a patent

Microsoft does not publish source code and would be impossible for a would be imitator to recreate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is lead time

A

Use IP quickly before anyone else, first mover advantage - link to Klepper?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are confidentiality agreements

A

Binds two parties that share the IP to prevent them sharing with a third party
Share risk
E.g airbus consortium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the most commonly used approach

A
Varies by sector 
Manufacturing sees formal
Services informal 
Variation by firm size and resources 
Strategic protection is used overwhelmingly
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are the advantages of formal protection

A

Provides assurance that parent company will be able to capture economic value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the disadvantages of formal IP protection

A

Owners of IP can make extraordinary gains
Seeing trend towards pre empire patent to prevent other firms exploiting new opportunities
Patent thickets- people can’t enter
How is this socially optimal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are the advantages of informal IP protection

A

Do not create public ally protected monopolies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What are the disadvantages of informal IP protection

A

IP remains secret and firms do not learn from each other

Prevents diffusion of new ideas

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What are key debates around IP protection

A

Do all the formal support is it achieving be good
Does formal IP have a positive impact on stimulative innovation
If patenting R+D does have a social benefit what is the correct level of reward
- who were the precursors?
Stand on the shoulder of giants
Is it right precursors don’t get a reward

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is licensing

A

Small number of firms who simply create IP then sell it

If there is no buyer then they are going to get commercialised

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What are the positives of licensing

A

Inventors do not have to undertake the final stages of innovation
Appropriate for new and small companies that lack financial resources
Firms with innovative capabilities but lack complementary capabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is open source innovation

A

Original source code of software is made open to other developers
Try to create a new market
Need critical mass

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What do jaffe and Lerner say are the dark side of patents

A

Some firms have ceased to see patents as weapons of defence and have started using them as offensive weapons to disrupt and threaten ongoing and future plans of competitors

There has been an escalation is patent litigation, partly due to rises in patenting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
What are rememberants in the attic
After CAFCs creation firms likelihood of succeeding in court increased and firms began pursuing royalties for patents they hadn’t enforceable The disruption of dormant patents disrupts the ongoing process of innovation
26
What is the Texas Instruments example
Sought royalties for a patent they held on integrated circuits and made 800m by 1999 Threatened innovation process in the whole sector
27
What are the implications of cross licensing
Many trade rights to use each other’s patents Restricts competition Raises questions whether patents have a useful function every company wants the best portfolio May stifle entry because firms cannot build large enough cross license portfolios or afford royalties particularly smaller firms
28
What is the estimated cost of defending a patent if 25m is at risk
2-4.5 m
29
What is jaffe and Lerner’s battlefield assessment of patent
Maintenance of a strong patent system is essential in industries Patent litigation is expensive and risky May innovative firms are in constant conflict Increasingly the patent system is a source of uncertainty and cost
30
What are the 3 tests that must be passed when applying for a patent
Utility - does the invention really do anything Novelty- is the invention original Non obviousness - even if new, would the claimed invention have been obvious to one skilled in th art a the time of the invention
31
What are the 3 choices if someone is accused of infringement
Agree to take a license and pay royalty Stop doing the alleged infringement Continue and wait for the patentees next move
32
What are the problems with the US patent system
Hands out bazookas to anyone who asked for one regardless of novelty and non obviousness Now have arms race that undermines rather than fosters the crucial process of technological innovation
33
Why do we need a patent system
Converts the intangible creation of an inventor into property that can be bought or sold The development and commercialisation of new technologies creates broad social benefits. It is therefore in our collective interests to have social, cultural and legal institutions that foster technological innovation
34
What are problems with the direct approach of giving the inventor money
Would be expensive How much money would be given Importance of its discovery is uncertain
35
What did Isaac Newton say
If I have seen far it is by standing in the shoulders of giants
36
Why are patents needed schotchner
The only way to ensure firms undertake every research project that is efficient is to let the firms collect as revenue all the social value they create But Strong patent protection leads to socially inefficient monopoly pricing Firms in a patent race may overinvest in research if the patent is worth more that the cost of achieving it
37
What does Swann say about IP
Refers to the output of a creative process Must be Intelectual- product of the mind Intangible Treated by law as property
38
What does Swann say about why we need IP
Economic perspective Want a return on the reasonable chance the invention will have commercial value and the fact it gives the inventor a head start By protecting IP we ensure that the creative firms they will return economic value on their inventions and encourage them to invest in innovative creativity
39
What does Swann say about formal IP
Often more effective in the US and UK but may offer weaker protection in other markets Some companies have suggested it is expensive and time consuming and offers inadequate protection this strategic is more favourable
40
What does Swann say about patents
In US they last 23 yrs Grant exclusive rights to the inventor Only applies for a fixed term Must disclose all details of the invention Once a. Reasonable profit is made it is argued the patent should lapse
41
What does Swann say about the case for and against formal IP protection
Formal IP overcomes the free riding problem They form monopolies Many may make more returns than required to incentivise Can provide excessive protection Pre emotive parenting - economy at large takes no benefit. Especially undesirable In pharma
42
Why is Coca Cola an example of secrecy
They maintain that all published attempts to reverse engineer the formula are incorrect
43
What does Swann identify as a risk of lead time
Fast second | E.g JVC vhs system more successful than Phillips
44
What are the three things open source mean
IP rights are not abandoned, the holders just allow others to use it too Original source code is made open to other software developers Software can be freely distributed
45
What does jaffe and Lerner say about cross lisencing
If we are confident we will have access to a wide pool of new technology from many cross licensing partners we may not feel as intense pressure to develop a new technology of our own firms can join forces to control markets E.g summit technology and VISX laser eye surgery
46
What impact does cross licensing have in small firms
They may have a narrow technology base and thus will be at a disadvantage in negotiating cross licenses
47
What does a patent give?
The holder of a patent had the right to prevent anyone else from making, using, selling or importing an object or device that incorporates any features covered by the specified claims
48
What does jaffe and Lerner say about big pharma
If they weren’t granted patent protect then competition would drive down the price however of this is the case no drugs would be developed at all because it becomes a game of heads younlose big, tails you lose a little
49
What does jaffe and Lerner say about broad patent protection
Gives maximum incentive but may discourage improvements Edison lightbulb- rate of innovation slowed Monopoly temporarily inhibited subsequent improvement and development of the industry more. Broadly
50
What does scotchmer say about social value
If later innovation couldn’t be developed without the first then the social slur of the first included social surplus If the first reduces cost of achieveing the 2nd then the cost reduction is part of social value If 1st accelerated development of the second then the value includes getting the second innovation sooner
51
What does stockmen say about broad protection
Leads to deficient incentives to develop second generation products Inflate incentives for the first Requiring every later innovator to license will give deficient incentives for later innovations
52
What does soctchmer say about prior agreements
The initial patent holder can agree to share both the cost and proceeds of the second innovation and will do so when benefits exceed costs Prior agreements lead to more efficient investment firms by second generation products
53
What does hall and van teen Em argue and how can r+D effectiveness be measured
Can tax be used to stimulate R+D? Ask does the level of good supplied after implementation of the policy is such that the social return is equal to the societal cost Compare the amount of incremental r+d and the loss in tax revenue Typically the cost of research is based on cost benefit analysis The amount is of R+D induced v loss in tax
54
What evaluation methods do hall and van reenen identity
Event and case study - ask managers how their r and d spending has been effected Compare behaviour before and after a surprise event Natural experiments Quasi experiments
55
How successful in incentivising with tax credits
Evaluation of US system revealed a dollar for dollar increase a
56
What are the concluding remarks of van Helen and hall
Tax treatment of R+D is increasingly becoming more lenient and increasingly countries will turn to the tax system away from direct grants Tax has an effect on R+D performed
57
What does stochmer say about prior agreements
With a prior agreement the initial patent holder could be approached by a second innovator whom may have an improvement and suggest they share both the costs and proceeds of research Gets around divestment incentives of second innovators It is not necessarily optimal to protect the first innovation so broadly that every derivative generation product is infringed
58
What did Martin skreli
Bought the rights to AiDS drug darapim and raised the price from 13.50 to 750
59
Why does Netscape reveal the complexity of patents
US department of justice found Microsoft infringed upon Netscape in her browser wars but it took 8-10 years to get a settlement by which time Netscape was bankrupt
60
What is the example of Apple Corp v Apple computers?
Apple Corp let Apple computer use name but not allowed to go into music industry Apple launched iTunes
61
Why does cross licensing restrict competition
Every company wants to have the best portfolio Companies might be better off if they just stopped patenting but there is no way to achieve simultaneous change For small design firms, patent protection is critical New firms that have small portfolios may be significantly disadvantaged Lexar media and samdisk
62
What does Swann identify as the most attractive method of protecting IP
``` Lead time CA Secrecy Complexity of design Trademark Copyright Patent Registered design ```
63
What do jaffe and Lerner say about controlling risk in big pharma
Must earn a return on research and cost of failures 5,000-10,000 tested, 250 pre testes, 5 commercially viable
64
What is the problem with low quality patents
When the patent office falls down on the job, then the quality of the patents issued deteriorates e.g amazon one click
65
How is Tesla an example of open source
Sustainable transport Enforcing patents would inhibit others Need to create a new market and need critical mass