One year ago, Elon Musk announced that Tesla would dismantle barriers to the use of its technology by “open sourcing” its patents and making them available for all acting in good faith to use. Because patents are usually used to close, not open, doors to competitors, the move created confusion and criticism.
But now, it also appears to have heralded a quiet revolution. Following Tesla’s announcement, Toyota and, just weeks ago, Ford, announced that they would also share their clean-car patents with others (Ford, for a fee). In February, LG promised to open its 29,000 patents to small and medium-sized companies, and make more of them free to start-ups. In March, Panasonic pledged to open its source code, technology and patents to expedite research on the Internet of Things. Daweoo and a number of Korean firms, including Samsung, Hyundai Motors, and Lotte have announced new steps toward collaborative R&D and innovation. Companies such as Facebook and Blockstream have announced that they are developing technology in the open in areas like 3D printing, Bitcoin, and drones, engaging in massive sharing of what otherwise would be proprietary technology.
These developments demonstrate that permissionless innovation and patents – usually thought to not mix – can co-exist and support each other, my forthcoming paper argues. When companies use the patent system strategically to include, rather than exclude, they boost both freedom to operate and the dissemination of their own ideas.
For example, while intellectual property can be crucial to protecting ideas and know-how generated inside an organization, today nearly half of new manufacturing innovations come from outside the organization, often from customers, technologists, and others, an important survey by Ashish Arora and his colleagues have found. While sometimes, the absence of patents helps, sometimes, patents can make it easier to make a deal.
The problem is, the patent system has paid relatively less attention to such “open” strategies. There are no easy ways to waive, donate, or dedicate certain rights while retaining others. As a result, unfortunately, many of the one-way promises that companies make – to open their patents or hold them only defensively for example – are fragile, subject to changes in company leadership, ownership, and philosophy. It’s also harder to buy and sell technology than it could be. You can’t tell by looking at a patent whether it’s available for licensing; the European Union estimates that $20 billion is spent each year reinventing technology that has already been created.
If an inventor wants to open her technology for others to innovate without worrying about permissions, there is no way to guarantee that the Patent Office will not issue a patent over the technology to a later applicant, an issue that goes to patent quality.
But declines in the cost of communication and computing, and increases in product complexity make it an opportune time for a pivot towards collaboration in the patent system. The patent system should pay more attention to supporting the rights of patentees to enable rather than to forbid, others from practicing patentable inventions, and to sell or waive certain patent rights or rights among certain populations. For example, if a patent holder wants to retain only rights to exclude larger competitors, or to waive all but defensive rights, enabling free use by green, humanitarian, educational, or start-up projects, for examples, it should be possible to do so. But presently, there are no easy ways to do so.
The market has devised a variety of approaches to fill the void. Over 1,300 companies, including five of the top 10 patenters in the world, have signed the patent “non-aggression” pact of the Open Invention Network, committing them to granting royalty-free patent licenses over Linux technology to other signatories. Twitter, AirBnB, and many other companies have pledged to limit their patents assertions, and more than 20 companies including Google, whose patent portfolio ranks eighth in the world, and Canon, which has the third most patents, have committed to restricting the transfer of their patents to entities focused on patent litigation. According to surveys, 45-60 percent of patentees acquire patents to access the technology of others. While defensive motives and commitments are vulnerable to changes in ownership and management of the patent, they demonstrate the appetite for a policy option.
As I detail elsewhere, other patent systems support such strategic uses of patents in a variety of ways. The UK and Germany provide a discount on patent fees when reasonable and non-discriminatory licenses are offered. The European Patent Office, the global benchmark for quality, consults channels by which inventors can essentially alert the Patent Office that they are putting their idea into the public domain and a patent should not issue over it. Most of the world gives patentees the choice to cancel their patents yearly, rather than only every 3.5 years, like we do here.
In the United States we too should explore the idea of creating one or more “open” patent options that would allow inventors to share their technology broadly while still retaining rights, for example, to enforce patents for defensive uses. We should make it easier to waive and dedicate patent rights to the public and engage in technology transactions. Congress should require the U.S. Patent and Trademark office to develop a plan to provide more “open” options to innovators, based on the recommendations of economists, technologists, academics, and industry. The availability and uptake of an “open” or defensive patent option, for example, would, over time, decrease the incentives for wasteful patenting — replacing mutual deterrence with mutual disarmament.
In the meantime, innovators will continue to hack the patent system to fit their needs. For example, when a Volvo engineer invented the three-point seatbelt in 1959, the company dedicated the invention, and the patent, to the public for the safety of all. At the turn of the 18th century, Benjamin Franklin refused to patent what came to be known as the Franklin stove, writing, “as we enjoy great advantages from the invention of others, we should be glad for an opportunity to serve others by any invention of ours.” Today’s 3D printing, Bitcoin, drone communities, and other emerging technology communities can benefit from exploring community models like that pioneered by the Open Invention Network. Our patent system, likewise, should continue to reinvent itself to keep up with the diversity of ways to innovate.
Chien is a professor at Santa Clara University School of Law and former White House senior advisor, intellectual property and innovation, at the Office of Science and Technology Policy. Follow her on Twitter.