Patent use, Technology Licensing and IP management in UK firms

Lead Research Organisation: Brunel University
Department Name: Business School

Abstract

In this proposal we aim to work with our partner the UK Intellectual Property Office (IPO) to gather evidence on the extent of recourse to patent protection in the UK economy, the use of patents by firms and on the strategies being used by firms to manage their IP and circumvent the problems caused by overlapping patent rights or 'patent thickets'. We bring new academic thinking on these issues (in the US and UK) to bear on a small scale survey where the user community is involved in generating and gathering the data needed by them. By doing this we will be able to plug important evidentiary gaps about the recourse to patenting for innovative firms and also the use of patents though licensing and cross-licensing in the UK-wide economy. In addition a detailed survey of UK IP management practices based on similar surveys conducted in the US will enable a deeper understanding of the patent thicket question as well the measures UK firms are taking to gain 'freedom to operate'. We expect that this understanding of IP management practices will be a valuable input in IPOs training programs to raise awareness in small and medium firms and can also inform IP policy in the UK.

Planned Impact

This is a knowledge exchange programme where we scope out, with the UK Intellectual Property Office (IPO) as partner, the possibility of deepening understanding of how IP is managed in UK businesses. This would use two short surveys significantly based on academic ideas that have underpinned such inquiries in the US and Japan. There are a number of non-academic communities that are active in the areas of patents and other aspects of IP, who could benefit from a fuller knowledge of academic research methods and research findings. These include users in the public domain such as the the IPO itself and also the Office of National Statistics and the Department of Business Innovation and Skills and also non-academic users such as the IP community of lawyers and small businesses.
The choice of UK IPO as the partner is crucial to securing a broad impact for this proposal. We say this because reaching the findings of our enquiry to the wider audience of businesses and IP lawyers can be better achieved if we can input into the IPO's business support and awareness activities to make our findings accessible to these different users. These include inputting the findings of the joint research into their regular newsletter IP Insight and their business support programme.
In addition we will also produce a policy briefing document which will be presented at a joint IPO-Brunel organised conference. We will include the managerial implications of our research into on-going training and awareness programmes which are conducted on a regular basis by the UK IPO. We will also consider the scope for incorporating the lessons on IP management into the national and international management standards frameworks such as ISO 9001, initially through consultation with BSI and UKAS.

Publications

10 25 50
 
Description Our research has demonstrated the value of patenting to innovative UK firms, challenging the widely held view that patents were no longer fit for purpose. Based on analysis of the Survey of Innovation and Patent Use (SIPU), led by Brunel
University, commissioned by the Intellectual Property Office (IPO), and implemented by the Office of National Statistics (ONS), we show that whilst only 3% of all firms
take advantage of patenting, when looking at those firms which innovate this number rises to 40%. The research shows that the size of the organization does not influence the likelihood of patenting; rather the strongest factor that determines whether a business is likely to patent is the ability to create novel innovations and volume of R&D undertaken.
Another key finding of the research is that firms are relying more often on technology licensing (underpinned by patents) to keep up with the market especially when innovation is limited by constraints on resources. Between 2009-2012 the study estimated that expenditure on technology in-licensing was around £6.9 billion a year in the UK. This equates to almost 40% of the total business enterprise spending on
R&D, and over 3% of gross investment in the UK. Industries where innovation rates
are low were most likely to use technology licensing in a bid to keep up with the market. In contrast, industries with high rates of innovation were less likely to use licensing possibly due to the desire to maintain exclusivity and avoid having to share a technology with competitors. We also studied open innovation practices and their relationship to patent propensity distinguishing between technology leaders and technology followers. We found technology leaders who were open innovators tended to patent more than technology followers. patenting is thus salient even when developing products through open innovation.
Exploitation Route Our analysis has important implications for patent policies. First, it points to the need to distinguish between patenting and the proportion of innovations patented. Large firms have more patents because they have more innovations but truly innovative small firms can also benefit from patenting. With our partner the UK IPO we have made this point to the Statistics department of the BIS who have accordingly amended the wording of questions in the CIS 2015 and CIS 2017. Second, our more recent analysis points to the link between the type of innovator and patent propensity. Technology leaders need to be treated differently when compared to technology followers.
Sectors Creative Economy,Government, Democracy and Justice

URL https://www.gov.uk/government/publications/innovation-patenting-and-licensing-in-the-uk
 
Description The question used by us in the SIPU survey to assess patent propensity have been adopted in the latest two Community Innovation Survey questionnaires viz. CIS9 and CIS 10. Based on our analysis we also suggested that a question assessing the regularity of R&D activity be included in the CIS questionnaire which too has been accepted. The IPO sponsored telephone module on Survey of Innovation and Patent Use v.2 was administered by the ONS soon after the CIS9 in 2015. The two surveys are linked by a key question. These data are a valuable source of information on patent use for the IPO. We now know the main reasons why firms do not patent and trademark as well as how the innovation portfoilo of companies is protected using patents, trademarks but also lead-time advantage, complex design and secrecy.
First Year Of Impact 2013
Sector Digital/Communication/Information Technologies (including Software),Education,Government, Democracy and Justice
Impact Types Societal,Policy & public services

 
Description Creation of a new database on barriers to patent and trademark use in the UK
Geographic Reach National 
Policy Influence Type Influenced training of practitioners or researchers
Impact In the project we developed a new survey methodology which would place small and large firms on an equal footing and use the existing Community Innovation survey database. Using this methodology the UK IPO developed a database to understand the barriers to formal intellectual property usage. The PI designed the new survey and worked with the ONS to implement it. After the UK CIS2015 was released, the PI signed a MoU with the UK IPO to analyse the data on the barriers to patent and trademark use. The analysis revealed that four assumptions that often underlie thinking about patent policy were incorrect. First, we didn't find any evidence when looking at a single innovation that small firms were less likely to use patents than large firms. Second, we find that disclosure of information, modelled by many theoretical papers as the most common barrier to patenting, was in fact a barrier to patent use for very few innovating firms but patentability was an important issue. More research needs to be done to understand what patentability really means. Third, we found that while open firms do patent and trademark less than other types of firms, openness was a larger barrier to the use of trademarks than patents, suggesting that market sharing is more problematic when compared to technology sharing. Fourth, although there is a large and growing literature suggesting trademarking and patenting are linked, we found very little evidence of a one-to-one correspondence between innovations and trademarks -- firms might introduce new products and still use (extend) their old trademarks to cover these newer products.
 
Description Estimating the value of technology licensing in the UK
Geographic Reach National 
Policy Influence Type Influenced training of practitioners or researchers
Impact An important social benefit of patents is the circulation of knowledge in the economy through technology licensing. Working with a member of the economics and Research Evidence team at the UK IPO, I used the UK CIS to estimate the volume and value of technology licensing in the UK economy.
URL https://www.enterpriseresearch.ac.uk/wp-content/uploads/2016/05/ERC-ResPap43-AthreyeEveleigh.pdf
 
Description Member of Research Experts Advisory group of the IPO
Geographic Reach National 
Policy Influence Type Participation in a advisory committee
Impact The advisory group reviews the policy briefing and policy evaluation documents of the UK IPO. in the last two meetings I have evaluated reports on barriers to patenting and the usage of trademarks and suggested improvements in those documents.
 
Description member of IPTAG, Department of Trade
Geographic Reach Multiple continents/international 
Policy Influence Type Participation in a advisory committee
Impact IP in trade agreements (IPTAG) is an advisory body which was set up by the Department of trade to look at IP chapters in the new international trade agreements that are being drafted in the wake of BREXIT. The group reads draft Ip chapter and provides comments on them.
 
Description member of the Research Board, Big Innovation Centre
Geographic Reach National 
Policy Influence Type Membership of a guideline committee
 
Title Survey instrument developed with UK IPO 
Description The Survey of Innovation and Patent use was designed in collaboration with the Economics Research and Evidence group of the UK Intellectual Property Office (ERE-UKIPO) to plug important evidentiary gaps that hampered an assessment of patetn policy and supplement information available through the UK Community Innovation survey. It includes questions on technology licensing and patent propensity which are important to estimate for the work of the UKIPO. 
Type Of Material Improvements to research infrastructure 
Year Produced 2013 
Provided To Others? Yes  
Impact We shared the survey instrument with the Head of Research and Innovation Statistics at the Department for Business, Innovation & Skills who has used it as an input into the UK community Innovation Questionnaire for 2015. 
 
Title Survey instrument developed with UK IPO, Innovate Uk and BIS 
Description We devised a 10 minute telephone survey module which asks firms about patent use in their most valuable innovation. An advantage of using this method is that small and large firms can be more easily compared with each other about their IP use practices. Following discussions with Innovate UK and BIS we included questions on financing and trademark usage. 
Type Of Material Improvements to research infrastructure 
Provided To Others? No  
Impact The data colelcted have been delivered to us in February 2016 and research is ongoing. 
 
Title Surevy of innovation and Patent Use 2013 
Description This survey was administered by the ONS and comissioned by the UK IPO 
Type Of Material Database/Collection of data 
Year Produced 2017 
Provided To Others? Yes  
Impact This database resulted in a change in the wording of the question on patent effectiveness asked in UK Community Innovation Survey 2015 and 2017. 
URL https://discover.ukdataservice.ac.uk/doi?sn=8263#1
 
Description Collaboration with BIS, Statistics directorate 
Organisation Department for Business, Energy & Industrial Strategy
Country United Kingdom 
Sector Public 
PI Contribution We shared our survey questionnaire and held meetings to revise the existing Community Innovation Survey Questionnaire so that Information relevant for the Evidence base of the IPO could be collected as part of the nationwide Innovation Survey..
Collaborator Contribution They assessed our request and accepted inclusion of two questions. The lead researcher is also in talks to revive the CIS user group and host meetings of it.
Impact This collaboration will result in useful data that can be analysed by the Economic Research and Evidence wing of the IPO.
Start Year 2014
 
Description Collaboration with World Intellectual Property Organisation 
Organisation World Intellectual Property Organization
Country Switzerland 
Sector Public 
PI Contribution This collaboration aimed to study in a multi-country context the nature of knowledge transfer from the public research base to private industry. My research (undertaken with Federica Rossi, Birkbeck College ) contributes a study of the UK which found Public Sector Research Enterprises to be more effective than University Technology Transfer offices in transferring knowledge to indsutry via patents and spin-offs. However, universities contribute more to technology transfer through informal channels. In a review of the experiences from five countries (Germany, South Korea, China, Brazil and South Africa) we identify the different roles played by institutional design and individual incentives in transferring technological knowledge from the science base to industry.
Collaborator Contribution WIPO assembled the team of country experts and also conducted an analysis of patent data.
Impact The outputs take the form of country reports ( owned by WIPo) and there are plans to collect this in a book to be published by Cambridge University Press. There are no published details yet.
Start Year 2016
 
Description Conference on Patent Use 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Public/other audiences
Results and Impact This was the end of project workshop organised together with the UK IPO and hosted at the Big Innovation Centre. Over 80 delegates attended the workshop - mostly from policy maker and legal practioner communities. The workshop contained six presentations which tried to benchmark the project's findings on patent use in the UK with what we know about the same for Europe, USA, Japan and Australia. We were successful in acheiving the following during the meeting:
(i) An assessment that our results were broadly in line with international findings- closer to US averages than Europe.
(ii) A honest exchange between academics and members of the legal community on the ethics of collecting data on licensing from inventors ( the favoured approach in the past but not ours)
(iii) A useful discussion of policy mechnaims that could eb put into place for acheiving greater Patent use in the UK and European economy.

We felt a major impact of the workshop was getting more acceptance from the legal community about the importance of data on mamagement on IP. The Intellectual Property awareness Network asked if they could publicise the findings as did the Chartered Institute of Patent Attorneys. The IPO also agreed to make anon-technical account of the workshop available on their website.
Year(s) Of Engagement Activity 2013
URL http://www.ipo.gov.uk/blogs/ipofacto/tag/patent-survey/
 
Description New research reveals value of patenting and technology licensing to UK firms 
Form Of Engagement Activity A press release, press conference or response to a media enquiry/interview
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Media (as a channel to the public)
Results and Impact This is the text of Brunel University's press release publicizing the findings. The press release can be found on the following URL:

http://www.brunel.ac.uk/news-and-events/news/news-items/ne_326848



Some organisations asked the Brunel PR office for copies of the detailed report to be sent to them.
Year(s) Of Engagement Activity 2013
URL http://www.brunel.ac.uk/news-and-events/news/news-items/ne_326848
 
Description Presentation by Mr. Tony Clayton ( ERE, IPO) to the OECD conference on Patent Statistics for Decision Makers 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? Yes
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact The talk sparked discussions on how to improve the statistics on Patent Use at the EU level by changes to the Community Innovation Survey.

After this talk, Tony made a huge effort to improve the UK CIS 2015 questionnaire to reflect what we had learnt from the better design of our survey instrument.
Year(s) Of Engagement Activity 2013
URL http://www.oecd.org/site/stipatents/PSDM2013_3_3_Clayton.pdf
 
Description Presentation on open innovation and patenting 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact Talk sparked discussions with TTOs about the conflicts in patenting and providing public science at the same time.

In the networking event after the conference got into discussions for further work with the Chartered Institute of Patent Attorneys.
Year(s) Of Engagement Activity 2014
URL http://www.insidegovernment.co.uk/event-details/intellectual-property/373
 
Description Presentation to the UK IRC workshop on Profiting from Service Innovation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Public/other audiences
Results and Impact The talk highlighted two issues:
For other researchers, the highlight of our work was the innovativeness in the collaborative methodlogy used by the project- which involved the UK IPO, ONS and the researchers. The collaboration of all three parties helped us realise a good datset with an over 60% response rate which compared favourably to the between 10-30% achieved in other research projects that had spent larger resources on collecting their data.
For policy makers and practioners the highlight of the work was the estimates of the size of the licensing market which we presented in the talk.

After the talk there was interest in contributing to the special issue of the journal Research Policy being edited by Professor Arora and myself on the topic of Patent Use. there was also interest in talking with the ERE about more collabortaive projects.
Year(s) Of Engagement Activity 2013
URL http://www.ukirc.ac.uk/archive/events-archive/profiting-from-service-innovation/