Conventional business wisdom says you should control and protect proprietary resources and innovations–especially intellectual property–through patents, copyright, and trademarks. If someone infringes your IP, get the lawyers out to do battle.
Although many industries still think this way (witness the recording industry), my research reveals that a new economics of intellectual property is prevailing. Increasingly, and to a degree paradoxically, firms in electronics, biotechnology, software, and other fields find that maintaining and defending a proprietary system of intellectual property often cripples their ability to create value. So as part of my work on New Paradigm’s Information Technology & Competitive Advantage Program I wrote a paper outlining a new approach to managing intellectual property.
The central argument is that companies and innovation communities can innovate better and faster when some of their intellectual property is pooled in wide-open collaborations. This doesn’t mean that companies should share everything–they need to work hard to defend proprietary advantages and this means that patents, trademarks, and copyrights will remain important tools for protecting their “crown jewels.” In essence, smart firms are treating intellectual property like a mutual fund: they manage a balanced portfolio of IP assets, some protected and some shared.
The paper explains why the economics of intellectual property are changing, presents some in-depth case studies on the life sciences industry (including an analysis of the human genome project) and outlines some conditions under which it makes sense to open up and share that apply widely across most industries. Thanks to the New Paradigm team you can download the paper in its entirety here.