Exploration Paper

Global Patent Pools: Why and How?

a first exploration

Date: Author: Contact: Version: Status:

2011-12-11 Jan Goossenaerts, Wikinetix info@wikinetix.com 0.2 Public, for comments

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Introduction ............................................................................................................ 3 Background ............................................................................................................ 4 2.1 Visions ........................................................................................................... 5 2.2 Diagnostic Realm ........................................................................................... 7 2.3 Therapeutic Realm ......................................................................................... 8 2.4 Enterprise Architecture for the Global Innovation Arena ............................ 10 3 Current Patent Systems and Patent Pools ............................................................ 13 4 Global Patent Pools: Strategic Visioning ............................................................. 14 5 RFID and Global Patent Pool .............................................................................. 17 6 Patent Pools for Climate Technologies ................................................................ 17 7 References ............................................................................................................ 18 Annex 1: List of Abbreviations.................................................................................... 21 Annex 2: The Regulative Cycle and its Role in Landscape Transitions ...................... 21

Document History
Version nr.
0.1 0.2

Date&time
26-03-2008 11-12-2011

Author
JG JG

What was added, updated, reviewed,...

First draft released to limited number of experts or stakeholders 2nd draft, a few small changes and additions on Climate Change Technologies

1 Introduction
This exploration paper introduces the why and how of the global patent pool concept. This is a first draft in an effort that should lead to architecture descriptions1 that are in line with the COMET Methodology (Berre et al., 2004-2006), yet fit with an anticipation of a future landscape transition pathway in a Multi-level Perspective (Geels and Schot, 2007). The report contributes a systems architect's2 perspective on the role global patent pools (compliant to some institutional design) could fulfill in the global innovation arena. The potential role of global patent pools in RFID convergence in supply chains is addressed very briefly. The guiding visions when addressing global patent pools are: (i) that in the global knowledge economy, control over certain essential facilities3 will have to be transferred from current private control to a commons4 regime; and (ii) the boundary between privately owned and public knowledge must become much better articulated. Annex 2 introduces the Regulative Cycle. It is a methodology pattern for planning and implementing change in a socio-technical system. a) Binding the global patent pool "design" to the Figure 2 in that annex, the real site work system in the center is understood to be the global innovation arena. In that arena, nations (G8 and UN members), firms and people act in manners that are historically constituted in the fusing of regimes of truth and care of the self (Foucault). b) Binding the RFID "deployment" to the same figure, then the real site work system in the center is understood to be the global supply chains. In those supply chains, firms and people act around the life cycles of products, documents and other artefacts that increasingly have RFID tags. c) Binding climate change technologies to the same figure, then the real site work system in the center is understood to be the supply chains of clean technologies. In those supply chains, firms and people act around the life cycles of those clean technologies, and their uses, for instance for producing energy, in agriculture, production etc. Because of the many and heterogeneous actors both in the innovation arena, and in (global) supply chains the efficient execution of the regulative cycle is
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The architecture descriptions will be included in a Visio template including pages for each of the required models. 2 Systems architecting is the discipline that strives for balance and compromise among the tensions of multiple stakeholder needs and resources, interests and technology (Rechtin & Maier, 1997). Such fit is achieved from a consideration of the full scope of the system of concern, from strategy to operations, from product and service functions to technology and market trends. 3 An essential facility is one in which duplication of a given facility, for instance a railroad, local telecoms network or oil pipeline, is precluded by the monopolist's inherent ownership advantages, but without which competitors cannot access the market. 4 Commons is a resource management principle by which a resource is made openly accessible to all within a community regardless of their identity or intended use (Frischmann, 2005, p 1022). By providing resources as commons, some degree of inclusivity in the socio-technical system is ensured.

hampered by so-called collective action dilemma's (Markus et al, 2006; Goossenaerts et al., 2008a). Yet, radical innovation is more likely to happen where the sociotechnical landscape had experienced severe stress (Geels and Schot, 2007). In such case, the broad-based diffusion of new technology (including new institutions) depends also upon an enligthened channeling (by business, sociological and political powers) of technology developments to respond to experienced stress factors. Observing the global innovation arena (landscape) and how the current IPR and patenting regime, as well as standardization regimes 5, facilitate it, the enactment of Global Patent Pools (GPPs) would represent a Knowledge Economy "regime shift". GPPs offer a solution option for the problem of excessive knowledge lead time and knowledge dissipation. But is there really a problem with the creation of value on the basis of intellectual property? And if so, do GPPs offer a feasible option, that when implemented, will indeed solve the problem? These are key questions for the policy planner. This report aims to be a stepstone towards justified answers to these questions. The RFID transition of supply chains is an area where GPPs could matter and be applied. It could be noted that the broad knowledge status quo is one in which progressive law professionals and macro-economists are strongly aware of contradictions and frictions with the current IPR regimes. However, the engineering and management disciplines are somehow, and mostly, blind for such trouble. For most of them, the status quo acts as just another "law" of nature or market. A chapter on background literature is next. It is succeeded by some brief notes on current patent systems and existing patent pools (mostly controlled and governed by private interests). Chapter 4 proposes some strategic visioning for global patent pools (as an institutional arrangement that would also need novel ICT solutions). Chapter 5 gives a few remarks on the RFID area as case where a GPP may be desirable. Chapters 3-5 are brief and must be further elaborated. On CiteULike, there is a public bibliographic list on: "the study of global patent pools as a means of accelerating the construction of (societal) value from privately owned knowledge as captured in patent systems". For details, see: http://www.citeulike.org/group/4408/library

2 Background
As a first step, and in line with recommendations on knowledge translation in the information systems area (Goossenaerts et al., 2008) background references are divided into four groups: vision, diagnostic, therapeutic and enterprise architecture. o In the vision section the focus is on describing some features of a desirable global future (the degree of support the vision enjoys matters: is it proposed by some, or does it enjoy broad-based consensus?). o In the diagnostic section6, the focus is on the articulation of (knowledge economy) conditions (pathologies) that substantially deviate from the desirable global future.

Copyright, Patenting and Standardization regimes could be termed "Knowledge Economy Regimes," as their object is knowledge and its protection and diffusion by institutions. 6 For an explanation of what the author means with diagnosis in socio-technical systems, see http://www.pragmetaknowledgeclout.be/collaborative-diagnostics

o In the therapeutic section7, the focus is on propositions and justified solution ideas or options, and how they could be merged into a "complex intervention" in the global innovation arena. o In the enterprise architecture group, the focus is on merging constructive elements, wherever they originate, in order to support planning for an improved global innovation arena. The (institutional/global public good) architecture process involving the stakeholders may produce other options then the global patent pool. The author believes that GPPs is a candidate in the set of promising options (this set is therefor not empty). The global socio-technical baseline shows a decoupling of social science visions which are more long-sighted and the engineering visions which appears to be more myopic (short-sighted). For this reason, both are addressed successively, and some remarks on the fusion of the visions are included.

2.1 Visions
In 2003, Sweden and France had taken the initiative to establish an International Task Force on Global Public Goods8 with the mandate: "to foster an enhanced provision of international public goods, global and regional, which are of critical importance for eliminating poverty and achieving the Millennium Development Goals (MDGs). In an interdependent world, extreme poverty and its manifold consequences are of concern to all; and it is thus in the enlightened self-interest of all to ensure a life in dignity for all. It is in our common interest to secure sustainable development in all its dimensionsenvironmental, social and economic "(GPG Task Force, 2006, p 141, Terms of Reference). In his endorsement of the final report (GPG Task Force, 2006), former French President, Jacques Chirac summarizes a vision of a global society in which development is more equitable and sustainable, and in which specialised international institutions and the provision of global public goods play a bigger role. In the changing global context the EU had earlier launched the i2010 Strategic Framework. Although the patent system and its shortcomings figure in the GPG Task Force report and in the expert papers on knowledge accompanying it, the "engineering" and innovation aspect of the patent system is not addressed. Regarding the patent system in particular, and on the basis of the Japanese experience in Wealth Creation, Hisamitsu Arai (1999) describes a vision for Intellectual Property Policies for the Twenty-First Century. In the area of engineering research and design, the Intelligent Manufacturing 9 System (IMS) global research programme has pioneered global research collaboration (Yoshikawa, 1994) involving both private and public sector entities from around the globe. Since the IMS launch, the EU has participated in it.

For an explanation of what the author means with therapy in socio-technical systems, see http://www.pragmetaknowledgeclout.be/collaborative-therapeutics 8 For details, see http://www.gpgtaskforce.org 9 Intelligent Manufacturing Systems, a global research program. See www.ims.org .

Over the past decade, while the web has embraced the globe and globalisation has acted as a driver for competitiveness, the international community has also articulated desirable outcomes, including social and environmental, and it has achieved consensus about global development goals, such as the Millennium Development Goals, and environmental targets, such as the Kyoto Protocol. Reporting frames such as that of the Global Reporting Initiative10 help organisations to report on environmental and social outcomes in addition to profits or losses. Following an analysis of the problems of co-operative engineering as well as methods and tools for virtual engineering of extended products, Goossenaerts et al. (2007) express an emerging vision on future engineering: ... to achieve society-wide, an excellent level of holistic harmonization and fit of technologies, organizational concepts and company/market culture. The improvement of the state of manufacturing industries as a whole envisioned in the IMS program (Yoshikawa, 1994) includes industries ability to respond to global and local challenges and to contribute to realizing public policies while delivering value to the civil sector. The balance between the public benefit from creation and the private reward for the creator is an issue that Barton (2006) raises. Goossenaerts et al. (2007) call for the improved articulation of private and public phases in the product knowledge life cycle. Civil sector stakeholders should avoid the trap of hyperbolic discounting11 in their dealings with environmental and social values, and with knowledge. Influenced by Kimura (2005) it was written: "Whenever knowledge on a product is captured by any stakeholder, this must be done early and comprehensively to allow for further sharing beyond the private boundary, and with transparent reflection of its hosting frame of reference in the knowledge evolution". One of the functions of the patent system is that it allocates exclusive rights for new knowledge as it moves from the private to the public sphere. Once the knowledge becomes public, and thus a common pool resource, its "structured" provision gets neglected.12 In its current setting, the patent system has a focus on capturing product or process knowledge (in rather traditional formats), assessing the originality of new claims, and delineating what is owned by whom. The knowledge evolution is present in the heads of the examiners, and other experts, and some of it may make it into

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The GRI was launched in 1997 as a joint initiative of the U.S. non-governmental organisation Coalition for Environmentally Responsible Economies (CERES) and United Nations Environment Programme with the goal of enhancing the quality, rigour, and utility of sustainability reporting. The initiative has enjoyed the active support and engagement of representatives from business, non-profit advocacy groups, accounting bodies, investor organisations, trade unions, and many more. Together, these different constituencies have worked to build a consensus around a set of reporting guidelines with the aim of achieving world-wide acceptance. Global Reporting Initiative (2002) Sustainability Reporting Guidelines (www.globalreporting.org) 11 Hyperbolic discounting is a term economists use to refer to the tendency of people to use lower discount rates to events in the far future and high discount rates to events in the near future (Perelman, 2003). 12 Digital library initiatives are addressing this broad issue, yet they lack the data structuring techniques that companies use to capture product knowledge (e.g., Product Data Management, PDM, and Product Lifecycle Management, PLM).

(engineering) textbooks. Generally speaking, the knowledge is not, or only sparsely, externalized. Given the current intensity of innovations, the traditional "knowledge care" solutions are unlikely to scale up.

2.2 Diagnostic Realm

On the broad negligence of common pool resources by market economists, Bromley and Cernea (1989) offer an eye-opening analysis. By providing resources as commons, some degree of inclusivity in a socio-technical/bio-physical system is ensured. In many cultures, common property regimes have been prevalent for the sustainable management of natural resources such as forests, watershores, grazing and farm lands. Bromley and Cernea describe how market economists have often overemphasized the enclosure of certain commons, under-appreciating or neglecting the sustainable outcomes that many cultures had achieved with common property regimes. In the IPR area, knowledge as resource is partly common, and partly private, with patents regulating the allocation of knowledge from its articulation: a patent grants for non-rival goods a monopoly during a period of time (exclusivity) in exchange for sharing the knowledge through its publication. John Barton (2006) reviews the role of government support and of intellectual property rights in encouraging the production of knowledge. He discusses several important institutions and rules governing the production of knowledge for development and other global public goods and makes several recommendations after reviewing resource levels and identifying gaps. Joseph Stiglitz, former Chief Economist of the World Bank, addressing a WIPO audience, discusses the broad development-country problem of turning knowledge into outcomes (Stiglitz, 2004). In his paper, Stiglitz focuses on compulsory licensing in the pharmaceutics area. As we will see later, a patent pool must somehow include licensing agreements among the pool members and their customers. Stiglitz also refers to a number of engineering innovations where competing IPR holdings and vagueness about what knowledge is patentable, created barriers for innovation (aerospace), or nearly did so (automobile): o Regarding airplane development: the conflicting airplane patents held by the Wright Brothers and by Curtis impeded the development of the airplane, until in World War I, the US government forced the pooling of patents. o In the automobile sector, a patent granted to Ransom on "a four wheel self propelled vehicle" was used to try to coordinate a cartel among automobile producers; the cartel failed only because Ford challenged the patentand won. Goossenaerts (2008) indicates that what Ransom tried to patent was architecture. Considering IPR, we must wonder about the boundary of the common and the private knowledge in the intellectual resource. In the software industry, where the diffusion of software applications and related services has risen to the landscape level, most applications remain silos with proprietary architectures and content encodings that are barriers to interoperability. Even most open-source software lacks an open architecture that would enable users to compose or evolve their preferred desktop functionality, and plug-in new services on their content resources. No reference architectures are managed under a commons 7

regime. On the contrary, successive architectural de-facto standards are being determined by the agendas of dominant principals in the market. In software and related patents, the architecture is often part of the claims of originality. And on software markets, proprietary silo architectures and content encoding are the backbone of the dominant positions, globally and in niches. Resulting noninteroperabilities cause slow and expensive innovation: the demand-side misses (a long tail of) improvements due to the prevailing silo-architecture of software applications that work with proprietary content encodings. The supply-side selfishly pursues the lock-in of customers so as to derive rents from the high switching-costs, low integration capability, and high customization costs. Dani Rodrik (2005) describes how to go about complex interventions to accelerate economic growth. In contrast with the one-size-fits-all attitude of many economists, he illustrates how a diagnostic approach can articulate those issues that must be addressed in order for an economy to grow. A similar approach has not yet been applied to the software and services industry where growth is large, yet many potential "outcomes" may be missed due to the private control of certain essential facilities (Goossenaerts, 2007) and the rapid erosion of (end-user) investments that result from the (extreme) tactics by dominant players. Niche players and new entrants in the (increasingly global) market are discouraged (Goossenaerts et al., 2007): "For todays innovators the relentless expansion of the current legal apparatus may be generating a highly fragmented and complex system of rights whose management incurs high transaction costs, with the effect of discouraging those types of creative activities that cannot afford such additional costs (Ramello, 2005). Tragedy of the anti-commons (Heller, 1998) is the name of the institutional failure that is looming with the trend to stronger patent systems and the patchwork approach to intellectual property in information products (Pendleton, 2005). The Open Source Movement (Lerner & Tirole, 2001) and the Creative Commons licensing contracts (Lessig, 2001) are emerging practices at the other extreme. Neither of the extremes seems to establish the appropriate balance between the public benefit from creation and the private reward for the creator." Also public-sector stakeholders have a difficult relationship with the knowledge commons. In their regulating role, public sector agencies establish a good deal of the requirements for product designs must meet. Examples are environmental protection regulations for electronics products, and privacy protection recommendations for RFID systems. Where by-law required functionality is difficult to achieve, the innovation system may stall. A recurring problem is assessing what (combination of) functions and attributes are feasible, and when. To the regulators, Global Patent Pools, would offer both a systematic overview of the current state-of-the-art, and a structure within which the regulatory requirements could be expressed precisely, both regarding their scope and regarding the properties that products or solutions must meet.

2.3 Therapeutic Realm

In the area of knowledge (as a global public good) and access to it, the GPG Task Force proposed two types of (GPG Taskforce, 2006, p.xxi) intervention options. First, those aimed to enhance the common knowledge platform through international partnerships. Specifically, donor countries should expand their financial

commitments to enhance the global research and information capabilities necessary to overcome some crucial problems in the areas of rural development, environment and health in the poorest developing countries. Second, ... initiatives aimed to balance the effects of TRIPS 13 on developing countries. Specifically the task force called for the establishment of a multilateral agreement for access to basic science and technology (ABST) to facilitate the transfer of scientific knowledge and technological information to developing countries. Through ABST, developed countries would be committed to support poor countries in enhancing their capacity to assimilate, diffuse and generate knowledge. ... Barton (2006a) makes the following assessment (and recommendations): the intellectual property system as designed is not optimal for achieving its purposes, even from a developing world perspective, and not for developing countries. There is a serious argument that intellectual property rights are overly strong and in some situations may harm research. To respond to these concerns requires such actions in the patent area as limiting patents on fundamental discoveries and abstract principles, raising the standards for non-obviousness or inventive step to reduce the number of patents on minor improvements and easing the experimental use of patented technologies. "For all who benefit from more rapid development and diffusion of technology" Barton (2006b, p 37-38) writes: "it is essential to build in the appropriate antitrust/competition law counterbalances to misuse of intellectual property. There is at least a significant risk that the effect of intellectual property law is to strengthen existing global oligopolies and to slow the entrance into the world market of new firms from the more advanced developing nations.... The intellectual property and antitrust issues are complex, and it is hard to define a balance confidently, but, in at least some cases, antitrust law may help prevent abuses of intellectual property rights while respecting incentives to innovate." In the related task of improving global systemic arrangements, Barton (2006b, p 50) writes: The final task deals with the global systemic arrangements. The task is to choose among research, negotiate and implement treaties that strengthen global research capabilities and the global scientific and technological commons. It is also essential, especially in the medical and industrial sectors, to understand the costeffectiveness of research better, and to create institutional mechanisms to regularly re-evaluate the focus of international public sector support for scientific research oriented to the needs of developing nations and global public goods. In his chapter on Information as a Global Public Good, Maskus (2006) makes six policy proposals, three of which are related to the functions that global patent pools could fulfil. Under the heading of Initiatives to improve international technology diffusion, Maskus observes that International access to information on technology transactions (much of it in the public domain) could be improved without unduly diminishing incentives for creating knowledge (Hoekman et al., 2005). To mitigate problems in trading technical information across borders, information provided in a central clearing house14 could include descriptions of successful international technology
13

TRIPS, Agreement on Trade-Related Aspects of Intellectual Property Rights, http://www.wto.org/english/docs_e/legal_e/27-trips.pdf

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Intermediary sources of knowledge about successful technology-acquisition programmes undertaken by various governments could be provided by such international organizations as the WTO, World Bank, UNCTAD or UN Industrial Development Organization (Maskus, 2006, p 98).

transactions, including reasonable royalty rates and helpful contract clauses for encouraging local technological innovation and adaptation. Under the heading Public Access Pools and differentiated access pricing Maskus (2006, p 100) mentions: ... an approach to encourage research institutions to collaborate in the formation of information pools to which research laboratories, inventors and firms could have access at some cost.... potential users may be charged licensing fees depending on their identity (public research institution, university, private firm), source (developed country, middle-income country, least developed country) and anticipated use. Depending on the nature of the technology, licence fees could be fixed sums or shares of sales or profits. Under the heading A Treaty on access to basic science15 and technology Maskus (2006, p 100-105) explains the need for a treaty that would "...preserve and enhance the global commons in science and technology without unduly restricting private rights in commercial technologies. ...It maybe necessary to adopt a GATS-like approach to the treaty, permitting governments to reserve sensitive areas of technology and to designate different levels of commitment to open access." (See also Hoekman et al., 2005 Furthering the therapeutic options these authors and the GPG Task Force have proposed, the concept of global patent pools seem to offer a "systemic" option, that could meet (many, perhaps nearly) all stakeholder's requirements. Proving this is a (first) goal for the Chapter 4 on strategic visioning for global patent pools (its follow on versions). Reflecting upon the automotive and aerospace cases as cited by Stiglitz (2004), the backbone of a patent pool would be the product (family) architecture that could be classified as an infrastructure resource (Frishmann, 2005): it may be consumed nonrivalrously; demand is driven by downstream productive activity that requires architecture as an input (rather than by consumption); and it may be used as input to a wide range of goods and services. The architecture is embodied as a dominant design (Henderson & Clark, 1990) that is shared within an industry.

2.4 Enterprise Architecture for the Global Innovation Arena

In the final report of the International Task Force on Global Public Goods (2006), it is written: The under-provision of global public goods is not an abstract problem. The security
of states, the prosperity of economies and the health of people and the planet all depend on the effective supply of global public goods. To illustrate, we focus on six global public goods whose provision is critical to the health, prosperity and security of all people: o Preventing the emergence and spread of infectious disease. o Tackling climate change. o Enhancing international financial stability. o Strengthening the international trading system. o Achieving peace and security, which underlies and is essential to all the others.
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..it is not easy to determine the dividing line between basic and applied research. In principle, one would describe basic knowledge as that which is truly non-rival and, by itself, has limited commercial utility. Examples are numerical formulas, algorithms, discoveries, surgical methods, research tools and genetic sequences. Note that such forms of knowledge are not patentable under most legal jurisdictions. Another class of basic technologies would be those supporting the provision of GPGs, such as environmentally sound processes and health care. (Maskus, 2006, p 102)

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In illustrating the kinds of strategies needed to pursue these goals, we also identify a cross-cutting issuegeneration of knowledge. These are priorities because the threats posed by global ills are rapidly mounting. Because the issues are interlocking, each adding to the other, none are able to be adequately addressed in isolation (as in the vital relationship between trade and security or infectious disease and trade). Because the benefits of supplying them are substantial. Because failing to supply them would have significant and in some cases irreversible consequences. And because they are important to a range of public and private constituencies whose engagement is necessary for progress.

Recognizing the existence of a global innovation arena, possible changes to the intellectual property system will involve a considerable number of stakeholders16 (as well as variations in requirements across disciplines). If projects to improve the global public goods are executed singly and severally, then this could result in incremental, often local or regional, improvements. Every time a single project goes through the regulative cycle, leading to specific adjustments. While a lot of these single initiatives only focus on improvements within the (limited) scope of the project, the contribution to the knowledge delivery capabilities may be limited. Often when successful project results are transferred to a new situation it doesnt work out. The broad theme of knowledge localization has been addressed by Stiglitz (1999,2000). For engineering, increasingly strong social demands and constraints and environmental considerations direct manufacturing activities and product use to be more resource-saving and environmentally benign. Moreover industry must be globally competitive. Information technology promises to accommodate both requirements (Kimura, 2005). To keep an overview or ensure cumulative value and impact of multiple projects concerning the global innovation arena it is important to approach project execution (change management) from a programme perspective. In the programme approach, accumulated re-use of project results facilitates transformational and technical advantages. Enterprise Architecture, covering multiple aspects and perspectives as depicted in Figure 1, promises and assures such technical and transformational advantages. The benefits for the organization using enterprise architecture have been summarized as follows, [TOGAF, 2005]17: A more efficient IT operation Lower software development, support, and maintenance costs Increased portability of applications Improved interoperability and easier system and network management
16

Barton (2006a, p5) writes: "Knowledge management involves public and private actors as well as governmental and non-governmental ones. In the public sector, the institutions managing knowledge production and dissemination are mostly national ones: patent offices, public research funding agencies and centres, census offices and government statistical offices. Among the key private sector actors are the research and development departments of firms and economic actors such as accountants and stock exchanges. These actors are supported by a panoply of supervisory institutions: ethical commissions reviewing research procedures, government agencies reviewing corporate disclosures, organizations setting accounting standards and national academies of science reviewing disputed questions of science-based policy. At the national level, the government typically provides the policy framework and coordinates these actors and institutions". 17 Because for a single organization, the comprehensive filling of an enterprise architecture implies a large cost, the approach does not scale (down) to smaller organizations. A solution for this cost problem has been explained at http://is.tm.tue.nl/staff/jgoossenaerts/repository_structure.htm#H9 ; and it has been applied in research on VAT compliance in ERP Systems (Goossenaerts et al, 2008)

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A better ability to address critical enterprise-wide issues like security Easier upgrade and exchange of system components Better return on existing investment, reduced risk for future investment Reduced complexity in IT infrastructure Maximum return on investment in existing IT infrastructure The flexibility to make, buy, or out-source IT solutions Reduced risk overall in new investment, and the costs of IT ownership Faster, simpler, and cheaper procurement Buying decisions are simpler, because the information governing procurement is readily available in a coherent plan. The procurement process is faster - maximizing procurement speed and flexibility without sacrificing architectural coherence.

ICT plays an important role in the global innovation arena and in patent life cycles. ICT's role in global patent pools will build upon and enhance this role; yet ICT's (and global patent pools) deployment will be driven by the aligned goals of the multiple stakeholders in the global innovation arena (as expressed in mutually dependent and enterprise architectures)

Figure 1: Enterprise Architecture

An important challenge is how to cope with the Multi-level aspects (Schot et al, 1994) in the transition towards a global innovation arena that would be enabled by Global Patent Pools. How to organize mutually related "landscape/regime/company/person" architectural frameworks to allow and pursue synergies as different entities adopt ICT to create value and reduce risks in their operational processes or interactions is

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addressed elsewhere18. For specific applications part of the overall framework has been applied (partially validated) (Goossenaerts et al, 2008a and 2008b) It is proposed to use Enterprise Architecture techniques in the design of the institutional arrangements, as well as in the realization of the ICT-based services needed for the implementation of global patent pools. Society Wide Architectural Framework offers a means to comprehend how global-to-local public goods interoperate for value creation and risk mitigation.

3 Current Patent Systems and Patent Pools

Patents, their granting by Patent offices, and the exclusive rights they establish. Patent pools are usually run by private sector "law" firms (e.g., Pickering, InterDigital...). See van Overwalle (2007) for a brief summary with definitions and issues (fragmentation, royalties,...). The relation between standards and the patent pools, containing the essential IPR for the standard is very well illustrated by the ETSI/GSM case, as described by (Bekkers et al., 2002). Poor institutional maturity regarding IPR prevails. This is a theme that has been addressed by several economists, IPR specialists and innovation scientists. Whereas the patent system is a winner-take-all system (Stiglitz, 2004), infrastructural innovation requires technology-intensive collaboratives with a clear operationalization of the concept of a "suitable and fair reward" (Bekkers et al., 2002). Such a concept could help to base compensation on marginal contribution. Yet current IPR regimes lack the institutional perspective of the public good, and as Stiglitz (2004) notes: "the agenda of those pushing for stronger intellectual property rights is not so much concerned with efficiency and equity, but with rent seeking." Poorly designed property regimes encourage the co-existence of gentleman's agreements (Philips and IBM with their IPR for the speech coder in GSM, Bekkers et al., 2002) with extreme strategies such as: (a) general architecture patenting (Ransoms original patent for a four wheel self propelled vehicle, Stiglitz, 2004); (b) license without general declarations (Motorola in the GSM case, Bekkers et al., 2002); (c) non-disclosure patenting (InterDigital Technology Corporation in the GSM case, Bekkers et al., 2002)19. It is a known rule of cooperation that in absence of enforceable rules of equity, the defector will have the winning strategy (Nowak, 2006; North, 1990). In the case of IPR with neglected articulation of the boundary between private and public knowledge (what is public, or could be claimed to be private) (see e.g. Pendleton, 2005), the vagueness and/or lack-of-fit of the rules of the game are likely to create an arena that encourages "selfish" defecting (for the myopic profit objective) and
18

See http://is.tm.tue.nl/staff/jgoossenaerts/aa_innovation.htm#H0 for work-system context, see http://is.tm.tue.nl/staff/jgoossenaerts/repository_structure.htm for a mock-up style characterization of aligned architectural frameworks, 19 In a personal communication at a workshop in Tokyo, Prof. J. Reichman (11/2007) has indicated that such behaviour in the context of standards development is punishable by law (US Common Law).

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discourages "fair" players because, in the end, and in each niche, a single winner will take it all.

4 Global Patent Pools: Strategic Visioning

The Global Patent Pool solution direction would build upon the IPR policy that the European Telecommunication Standards Institute (ETSI) adopted from 1993 onwards, and upon the recommendations that Bekkers, Verspagen and Smits (2002) have formulated following the GSM case. The main function of a global patent pool is the structuring and bundling of IPR that is related to a single product family (and its standards) in an industry, for instance for a new biofuel refining process, or for RFID solutions and components, or for mobile devices. An additional contribution is that a pool's generic modularized product architecture offers a public reference structure with respect to which regulatory requirements for products could be expressed unambiguously. Different IPR pools can be mutually related, in accordance with part-of relationships in a product family20. Product Data Management, PDM, and Product Lifecycle Management, PLM systems in the private realm already embody the principles and technology that would underly global patent pools. ICT can support several functions that are required to enact and operate global patent pools, including the services (license fees21) for the IPR users and owners, and this in a very dynamic contemporary (socio-technical) landscape. The global patent pool would be operating in an environment which is being shaped by a number of trends, for instance as summarized in Table 1 (needs fuller elaboration, both for global patent pools, and for RFID).
Table 1: Business, sociological, political and technological trends shaping business/IT planning 22 Technology o electronic commerce o internet o mobile communications o "death of distance" o new media o increasing information content o rfid Competition o Imperatives o customer orientation o short lead time o cost/burden reduction
20

o o o o o

Policy inclusion/digital literacy result focus budget constraints equitable development fairness, yet small enforcement burden

o o o

Sociology demand for better and more convenient solutions balanced added value awareness (green) just-in-time delivery

See Goossenaerts (2000) for some supporting conceptual work, e.g. on phylogeny, typogeny and ontogeny. 21 A study by Tanaka et al (2007) confirms the importance of efficient licensing schemes. Abstract: This paper develops a quality-ladder type dynamic general equilibrium model with endogenous innovation and technology licensing as a major source of international technology transfer in developing countries. Examining the dynamic characteristics of the model fully, we explore the shortand long-run effects of both an improvement in the probability of reaching a licensing agreement with a given effort and an increase in the license fee rate. The model shows that the former promotes innovation and technology transfers in both the long and short run, while the latter discourages them. 22 This table instantiates for the global patent pool case the trends identified in Figure 11.4 (page 418) "Converging business, political, and technological trends that are shaping strategic business/IT planning" (O'Brien and Marakas, 2008)

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o supply chain with co-design Enablers o alliances o sub-contracting o explicit common pool

social responsibility

Questions that need more attention include: (i) to understand the opportunities that enterprise architecture offers for understanding global patent pools (and RFID as a case to apply global patent pools); and (ii) to operationalize these opportunities in a coherent and integrated business (policy)-and-ICT design (and not just continue business and policy as usual). A strategic visioning workshop, involving the stakeholders in the global patent pool institutional arrangements, could address the following themes. o propositions on how objectives in the different scorecard perspectives are aligned to the trends (financial/emissions, customer/external relations, internal process and learning and growth)23; o change target recommendations that indicate how the Global Patent Pool services can benefit all stakeholders (win-win-win-...) (Table 2). The multi-stakeholder challenge is how to cope with the Multi-level aspects (Schot et al, 1994) in a transition towards a global innovation arena that would include Global Patent Pools. Enterprise Architecture applied at multiple levels, and with aligned deliverables for the multiple stakeholders, offers a means to reflect lessons learned from the historic study of socio-technical transition pathways (Geels & Schot, 2007), in the planning of pathways towards a global innovation arena enabled by global patent pools, and capable of contributing to solutions to current global challenges (GPG Task Force, 2006). Refering to GPP4 in Table 2 (and the footnotes in it): The transaction complexities that are involved in innovation-diffusion accelerating measures are more likely to be handled in the context of a global treaty (see Hoekman et al., 2005), than that they will emerge from the prevailing IPR license practices. On the issue of self-regulation versus government regulation, see also Grajzl and Murrell (2007). The Global Patent Pool "Treaty" elaborated under the authority of WTO and WIPO could offer the enabling legislation that must facilitate (some form of) self-regulation for the individual pools. A Treaty could determine the license calculation and division principles, the participation principles for pool members and customers, and most other by-laws. Within such structures, each global patent pool (GPP) could proceed using the self-regulation approach. Operating under by-laws that reflect the typical role of industry common pool resources, with suitable IPR and licensing provisions, and suitable quality control procedures (e.g., Liaison structure with ISO), each GPP's role is to facilitate the public good built-up and the related competition in the industry (monopoly-prevention).

23

See Goossenaerts (2006) for the introduction of a generalized scorecard, generalizing the perspectives of the Balanced Scorecard, Kaplan and Norton (1996).

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Table 2: Draft Summary of Change Targets for Global Patent Pool (as a Global Public Good Initiative; included below are examplar descriptions; Targets should result from a study involving the key stakeholders)

TARGET DESCRIPTION GPP1

STAKEHOLDERS (LEADING)

If a dominant design is available, then a Patent offices patent will be allocated in it so as to establish its precise position in the state of knowledge From the moment that a patent has been holder and user of the IPR; accepted as describing essential IPR for a global patent pool operator certain component, it will be elligible for receiving license income that is allocated to that component; as Within a product family, a committee of Global Patent experts will agree the relative division of Governance body IPR among the components in the overall (one per pool) dominant design24; For each component, competing solutions may exist: as successor components outperform ancestor components, the governance body has to decide how new license income must be divided25,26. A solution for the multi-language patent WTO, G8/G20/G25 registers.27 WIPO, Patent Pool

GPP2

GPP3

GPP4

GPP5

24

Proposition by Bekkers et al (2002), to limit the cumulative license for a certain product to a reasonable amount (e.g., 30 % of its market value). 25 In current practice, the license fee is often paid as an investment at the point the technology is purchased and installed, yet with no "license fee room" for later improvements. Eg. a one time payment for a chemical refining process. With high "component" switching costs, including for the knowledge involved. Within the GPP, license fee could be partly upfront, and partly pay-as-you-go. As soon as a superior innovation emerges, it is an option for the user to switch to the new technology, with an acceptable cost for the upgrade, and a new beneficiary for the pay-as-you-go fees. The transaction complexities that are involved in such innovation-diffusion accelerating measures are more likely to be handled in the context of a GPP (implementing a global treaty for instance), than that they will emerge from the prevailing IPR license practices. 26 The division of the license fee for knowledge, and its impact on innovation must be understood in the context of the broader economic progress patterns, concisely described by Young (1928). He stresses three points regarding "the circumstance in which lies the possibility of economic progress, apart from the progress which comes as a result of the new knowledge which men are able to gain:" (i) that the progressive division of and specialisation of industries is an essential part of the process by which increasing returns are realised and that it is required to so see industrial operations as a whole; (ii) that the securing of increasing returns depends upon the progressive division of labour, and the principal economies of the division of labour, in its modern form are the economies which are to be had by using labour in roundabout or indirect ways; (iii) that the division of labour depends upon the extent of the market, but the extent of the market also depends upon the division of labour.
27

See in this context: Diallo, Goossenaerts, van de Meer (2008): Abstract: Patent granting, protection and publishing; fulfill indispensable roles in the globalizing innovation landscape. The world of Intellectual Property (IP) is evolving rapidly over 5 main orthogonal dimensions: 1. the diversity and incompatible evolution of laws governing IP protection (for instance computerized technologies); 2. the increasing amount of online deeplyindexed sources; 3. the growing interest for IP expressed by industry of knowledge; 4. the globalization of exchanges of practices between national and regional patent offices; 5. the predominance of language issues in data

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Offices GPP6 GPP offer a public reference structure with Product regulators respect to which regulatory requirements for products could be expressed unambiguously.

5 RFID and Global Patent Pool

RFID solutions, because of their potential ubiquitous deployment and the coinciding innovative business models, offer (perhaps) the kind of challenge/case that needs the global patent pool and essential facilities "remedies" addressed in the previous chapters. In the RFID case, not only the property regimes (patents etc), standards and codes of conduct (cf. the recent consultation on the RFID and Privacy directive) are at stake, but also one must scrutinize the business models and how they may seek the (illegitimate) private control of essential facilities (for instance, EPC Global's control of directory services, and the leveraging of it for obtaining competition-free rents monopoly). This situation must be scrutinized from the perspective of the essential facilities doctrine (see Goossenaerts, 2007 for some references and detail, though not applied to RFID). This point would need some thorough follow-on investigation. For such investigation (and its planning), this report may offer some ideas and background to build upon. A CIP thematic network on RFID Policy, might include such a follow-on investigation, engaging all stakeholder (representatives).

6 Patent Pools for Climate Technologies

The study by Latif et al (2011) mentions patent pools as a possible measure to facilitate access to climate change technologies (page 3). The policy brief contains both interesting facts, ideas and approaches to negotiations, which should be considered alongside the propositions in this paper.

exchanges and, finally, the need of computer infrastructure suitable for providing adequate means to browse and understand multi-lingual technical prior art documents. Despite those facts, converging trends in global markets, technology and science are progressively shaping a new socio-technical landscape in which the fragmenting impacts of linguistic, disciplinary, and sectored barriers can be overcome. In the process of improving access quality to databases of patents and prior art material, patent offices and private IP actors make use of assets (commons) of the international science and technology community such as for instance: scientific units, drawing conventions, classification schemes or industry standards. Huge collections of intelligible patent texts make massive Information Retrieval (IR) advances as well as Data Mining techniques very relevant. In this paper, we answer the strategic (knowledge chain) visioning questions for online services specialized for translating, searching, understanding and comparing technical documents. Global challenges imply that distributed management of content and delivery of services such as translation or automatic crawling become necessary, and converging technology trends imply these services become feasible. We will show examples of advanced electronic tools, targeting both professionals and large public, and aiming at reducing language gaps in large technology-related data such as patent-related material.

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Annex 1: List of Abbreviations

IPR: (to be completed) Intellectual Property Rights

Annex 2: The Regulative Cycle and its Role in Landscape Transitions

Originating in psychological practice, the regulative cycle (van Strien, 1997) has been extensively applied also as a methodology of practice, geared towards the "interested" regulation of the behaviour of groups or organizations in the desired direction. The cycle includes the following activities: evaluation (of system operations with respect to an instrument or via benchmarking), problem identification (selection from a problem mess), diagnosis (of the problem situation analysis), plan of action (design), and intervention (implementation).

Peer Intelligence (Market, Science, Roadmap, Benchmarking,..)

Problem /Gap Register PRM Problem Identification

reference model
Evaluation / Monitoring Translation

site specific s PRM site specific reference model Intervention Implementation

real site work system

Analysis and diagnosis

Plan of action Design

PRM: performance reference model

Figure 2: Regulative Cycle extended with Reference Models

21