Businesses are constantly looking for new ideas and solutions to stay competitive in the marketplace, and innovation has become the engine that drives economic growth and social transformation. However, protecting the way these ideas are realised while fostering collaboration and knowledge sharing poses an interesting challenge: the coexistence between intellectual property (IP) and open innovation.

This article seeks to clarify the balance between protecting intellectual property and promoting open innovation by analysing the benefits and challenges of both approaches and the strategies that allow them to coexist in order to foster an innovative and sustainable ecosystem.

Intellectual property (IP), according to WIPO, is a set of legal rights that protect creations of the mind, such as inventions, literary and artistic works, designs and distinctive signs that play a fundamental role in fostering innovation by granting creators exclusive rights over their works, encouraging investment in research and development.

By, for example, allowing inventors to obtain economic benefits and recognition for their efforts for their creations, IP motivates them to invest time and resources in developing new ideas. In addition, it provides a clear legal framework that protects creators from unauthorised copying, ensuring that they can defend their rights in the event of infringement. It also establishes rules that foster an environment where companies compete on the basis of quality and originality, not imitation, thus promoting fair competition. Finally, many forms of IP, such as patents, require detailed disclosure which ultimately contributes to the public body of knowledge.

However, excessively strict IP protection can, in some cases, create challenges by creating barriers that make it difficult for others to develop or improve existing ideas. In addition, the legal costs associated with maintaining and defending IP rights can be significant, especially for small companies or individuals, underlining the importance of collaborative and open innovation strategies. These strategies allow for burden sharing and maximising the value of IP by associating with key partners who bring complementary resources and knowledge, avoiding concentration of rights that could lead to restrictive anti-competitive practices.

In contrast, according to Chesbrough open innovation is a model in which companies intensively leverage both internal and external knowledge to enhance and accelerate their innovation. This approach offers numerous advantages; by collaborating with outsiders, companies can accelerate their development by gaining access to ideas and technologies that would otherwise take years to develop internally. In addition, sharing resources and knowledge can significantly lower the costs associated with research and development (RD). Collaboration with diverse actors also brings fresh perspectives and innovative solutions to existing problems, which diversifies ideas and contributes to the flexibility and adaptability of businesses, allowing them to respond more quickly to changing market demands.

However, open innovation also carries certain risks. Without suitable protection, inventors may lack incentives to invest in new ideas, as they may be discouraged if the security of their contributions is not guaranteed. In addition, open sharing of ideas may result in loss of control over their use or commercialisation, complicating the ability of creators to monetise their innovations. Without clear rights, it is difficult to ensure that contributors get fair economic benefits for their contributions, which can limit the effectiveness of open innovation.

At first glance, IP and open innovation seem difficult to reconcile, but it is possible to find a balance between the two. IP can be a valuable tool in open innovation projects, as long as it is properly managed, and as Sanchez, M. et al. state (2019), IP protection in open innovation projects is essential to attract investment and ensure sustainability.

Currently, a number of tools exist to protect IP in an open innovation environment, such as confidentiality agreements, licences for use, registries, knowledge management strategies, education and awareness raising, and the use of secure open innovation platforms. These allow knowledge sharing and collaboration with others, while ensuring that the rights of creators are protected. An example of how it is possible to balance protection with open innovation is the case of Tesla, which in 2014 surprised the automotive industry by announcing that it would not take legal action against those who use its patents related to electric vehicles in good faith. This strategy was intended to accelerate the adoption of electric technologies and ultimately benefit Tesla by expanding the market for its vehicles. Despite this openness, Tesla continues to protect other critical areas of its business, such as its trade secrets, and the patents, trademarks and software that it owns. Another example is Creative Commons licensing, which allows creators to decide how others can use their works, offering a balance between protection and sharing, which has been instrumental in promoting open content in the digital age.

It is therefore important for companies that want to initiate open innovation projects that strike an effective balance between protection and collaboration to prioritise robust knowledge management through the identification, codification and protection of critical business knowledge, ensuring that information can be shared effectively without compromising valuable IP; to rely on non-disclosure agreements (NDAs) before sharing sensitive information, ensuring that all parties are clear on the terms of use and rights over such information; and to make strategic use of protection mechanisms that allow them to use their assets either to lock out competitors or as a bargaining chip in cross-licensing negotiations that allow the sharing of specific technologies without yielding full control over IP, which is crucial to fostering collaboration without sacrificing ownership of innovations. Finally, in an open innovation environment, companies must be prepared both to defend their IP and to use it offensively. This means being aware of potential infringements and enforcing IP rights when necessary.

In conclusion, intellectual property and open innovation are complementary forces that, when effectively integrated, can catalyse economic growth. Understanding the fundamental principles of IP and the benefits of open innovation enables companies to develop sound strategies that protect their intellectual assets while taking advantage of opportunities for collaboration. Creators and organisations should carefully assess their objectives and resources to decide on the most appropriate strategy.

The future of IP and open innovation is full of uncertainty and change, especially with the advent of new technologies such as artificial intelligence and blockchain, which are transforming the creation, protection and use of intellectual assets. It is essential for business, government and academic institutions to work together to develop legal and regulatory frameworks that adapt to this new environment and promote sustainable innovation.

Laura Patiño
IP Business Management and Training

References

OMPI. (2005). Intellectual Property, Innovation and New Product Development. WIPO Magazine, 4(2), 2-5. https://www.wipo.int/wipo_magazine/es/2005/04/article_0002.html

Chesbrough, H.W, (2004) Open Innovation: The New Imperative for Creating and Profiting from Technology. European Journal of Innovation Management 7(4):325-326. Retrieved from https://www.researchgate.net/publication/280211463_Open_Innovation_The_New_Imperative_for_Creating_and_Profiting_from_Technology20041Henry_W_Chesbrough_Open_Innovation_The_New_Imperative_for_Creating_and_Profiting_from_Technology_Boston_MA_Harvard_Bus

Sánchez, M., Emiliano, J., Monterola, S., Eumelia, L. P. (2019). Management of open innovation and intellectual property rights. Peruvian University of Applied Sciences (UPC). Retrieved from https://repositorioacademico.upc.edu.pe/bitstream/handle/10757/648722/Mendoza_%20SJ.pdf?sequence=1isAllowed=y

Cantalapiedra, S. (s.f.) OpenExpo Europa. Propiedad intelectual en proyectos de innovación abierta. Retrieved from https://openexpoeurope.com/es/propiedad-intelectual-en-proyectos-de-innovacion-abierta/

Smith,J. Gay, R. Montagnon, R. (2020). WIPO. Intellectual Property and innovation in the service of the community. WIPO Magazine, 1(2), 5-8. https://www.wipo.int/wipo_magazine/es/2020/02/article_0005.html

Skibsted, J. (2024) How IP laws can be reimagined to stimulate innovation. World Economic Forum. Retrieved from https://es.weforum.org/agenda/2024/03/como-replantear-las-leyes-de-propiedad-intelectual-para-estimular-la-innovacion/