Intellectual Property Rights (IPR) in Knowledge
Management (KM)
Dr AK Sengupta
International Management Institute
Abstract
For an effective Knowledge Management system to be in place, the issue of ownership of the intellectual property of knowledge pieces can be of paramount importance. Safeguarding the IPRs in a transparent, efficient and effective manner facilitates identification, creation, acquisition and sharing of knowledge. This is particularly relevant for the bringing out the tacit knowledge residing with the experts and people with experience, grass root innovators and traditional knowledge holders. In this article, some of the pertinent topics related to IPR have been discussed together with their relevance to KM. The status of the IPR and R&D in India has also been briefly brought up, as well as the state of the Knowledge Society in this country.
Introduction
In the realm of KM, there are three vital processes, namely, knowledge identification, knowledge creation and knowledge acquisition. In organizational as well as societal contexts, the process of knowledge identification primarily concerns conversion of tacit knowledge that exists with people and groups into explicit and documental knowledge (on paper or on electronic contents), to clearly bring out what one knows and what one does not know that one knows, and make these explicit enough to be shared by people who may utilise the same for organizational or societal benefit. The knowledge creation process is one step ahead of knowledge identification in that it involves innovation and human ingenuity to bring forth new knowledge from the existing knowledge pool. Research, development, analysis, experimentation, introspection and many other activities are invariably linked with the knowledge creation process, that often leads to basic scientific knowledge which is then used by commercial organizations for producing new or improved products and processes that benefit society in general. Finally, there is the process of acquisition of knowledge that already exists elsewhere, -- with individuals, in universities, in research institutions, with the competitors. The purpose is to avoid “rediscovering the wheel” to the extent possible and to accelerate the process of enhancement of organizational capabilities through absorption and assimilation of the acquired knowledge, and further creation of new knowledge.
In each of the above three distinct KM processes, the issue of ownership of knowledge per se is of paramount importance. The intellectual property and ownership pertaining to a particular piece of knowledge, whether identified within, created by R&D or acquired from outside, needs to be clearly established and protected, to ensure equitable sharing of credit and wealth generated by the eventual application of that knowledge. Protection of intellectual property rights (IPR) and generating incentives for the owners are necessary for enhancing knowledge base approach to work, whether in the domain of industry and trade or in the grass root level innovations and traditional knowledge.
During the latter part of the twentieth century and in early twenty first century, the environmental system in which knowledge production and use take place has become very complex. There are many interactions between those involved, and feedbacks from markets and industry identify important and, often, radically new areas of research. The rapid obsolescence of old products and processes, faster exploitation of discoveries and innovations in new fields, and the efforts of governments to use scientific expertise more effectively in the pursuit of economic and social progress have led to policies and activities aimed at producing closer links among commercial establishments, research laboratories, governmental institutions and professional bodies. The global nature of business, economy and science and technology has broadened the scope of these links. IPR have the essential function of defining the relationships between those involved in these interactions in a changing cultural and regulatory environments, and bringing about net social benefits by increasing the rate of innovation.
Similarly at the grass root, with the level of innovations and traditional knowledge that exist in households, villages and rural economy, it is vitally important that intellectual property rights of the real knowledge holders are protected. A commendable work in this area has been done by the National Innovation Foundation (NIF), an IIM Ahmedabad based organization, who have in the last twenty years of efforts un-earthed more than 50000 innovations practised in the rural India. Approximately 100 of these innovations have been applied for patenting, including 6 for which US patents have been granted. Many of these innovations remained hidden until NIF detected them, and in many cases substantially improved them, before making them available for application to the world at large
The purpose of the present article is aimed at highlighting some of the issues concerning the interplay of IPR in the Knowledge Management Processes, in the industry, the grass root and traditional knowledge sectors, particularly in the Indian contexts.
What is Intellectual Property or IP?
Intellectual property, known as IP, allows people to own their creativity and innovation in the same way that they can own physical property. The owner of IP can control and be rewarded for its use, and this encourages further innovation and creativity to the benefit of us all. In some cases IP gives rise to protection for ideas but in other areas there will have to be more elaboration of an idea before protection can arise. It will often not be possible to protect IP and gain IP rights (or IPRs) unless they have been applied for and granted. Some IP protection such as copyright arises automatically, without any registration, as soon as there is a record in some form of what has been created.
As per the TRIPS nomenclature, eight categories of IP have been defined, for which protection of ownership rights can be sought. These are: i) Patents ii) Copyrights iii) Trademark and Service Mark iv) Design Registration v) Layout designs for Integrated Circuits vi) Trade secrets and Undisclosed Information vii) Geographical Indications and viii) New Plant Varieties. In this article we shall confine our discussions mainly on patents, though other types of IP may often be as important in deliberations in KM. In the fields of grass root innovations and traditional knowledge, for example, the geographical indications and protection of plant varieties can be of particular relevance.
IPR as an archive of global innovationsIPR System in general is a systematic process of disclosure and structured documentation of innovations that is accessible in the public domain. The System, however, gives rise to a guarantee for ownership rights by the Governments to those who created or developed the innovation in the first place, so that it can worked on, or utilsed for public good by the owners or licensed to others for commercial exploitation.
IPR database, therefore, becomes a fairly detailed archive of globally accessible knowledge base whose exploitation is subjected to caveats elaborated in specific National IPR Laws. A proper use of the IPR databases therefore forms an essential part of a global knowledge management process which can not only avoid “ rediscovering the wheel” but can also help in cost effective and strategic utilization of the knowledge that is already known, through appropriate licensing, transfer of rights, etc. Patent records, for example, contain a wealth of information on each patented invention, including the identity and location of the inventors and the inventors’ work domain, and the technological area of the invention. In addition, a patent documents also contain information on previous patents (“Prior art” and “citations”) tracing multiple links across inventions. Patent records thus can be a promising window on the Knowledge Economy. In reality, it is said that 80% of all information relating to innovations in Science and Technology are available only in the Patent Databases rather than in published literature in any other form.
Accessing the IPR ArchivesOn a rough estimate there have been more than six million patents granted in the world, more than eighty percent of which are now in the public domain ( at the expiry of the protection periods after the grant; for example, a patent has a life of 20 years). These patents are published by the authorities in the respective countries where their applications were first filed and granted. Many of these were filed and granted in several countries individually or through the PCT (Patent Co-operation Treaty) route. These publications are generally open for access by public at large anywhere in the world, through the websites of the websites of the Patent Offices of the country , such as
www.uspto..gov (for US Patent & Trademark Office),
www.ipindia.nic.in (for Indian Patent Office),
www.patent.gov.uk (for UK Patent Office),
www.jpo.gov.jp (for Japan Patent Office) etc, as well as printed publications.
Since novelty, originality and inventiveness are essential pre-requisites in seeking patent protection of an invention, searching of patent databases often is the starting point before applying for a patent, and also before initiating a research programme in any area of Science and Technology. Patent search and identification of citations as well as all “prior art” references are an art in itself, a complex procedure involving selection of “keywords”, databases, cross-referencing that needs to be pursued and so forth. While there are modern bibliometric techniques available for searching, several IT enabled retrieval technologies also allow targeted document detection, extraction, visualization and routing of databases.
Integrating IPR in innovation processes
Innovation is not about getting it right the first time, nor about perfecting an idea before exposing it to other people. Successful prototypes and experiments should be allowed to be rolled out gradually in order to facilitate and integrate learning. Such structures should allow organisations and individuals to learn from best practice, inside as well as outside the public service, and finally, there needs to be 'space', for refection, rejuvenation and forward development.
Innovation is the art of making new connections, and continuously challenging the status quo - without changing things for change's sake. Hence, innovation can be defined as a frame of mind. Successful innovation is first, and most importantly, about creating value. It does so either by improving existing products, processes or services (incremental innovation), or by developing products, processes or services of value that have not existed previously (radical innovation or ‘invention’). However, both kinds of innovation require the following mindsets to:
Challenge the status quo
Have an understanding of and insights into consumer needs
Develop imaginative and novel solutions.
In addition, innovation is generally associated with the following:
The willingness to take risk
Accepting high levels of ambiguity and uncertainty
Original thinking
A passion to drive the idea through to conclusions
The ability to inspire passion in others.
Innovation can usefully be viewed as being more about a certain frame of mind rather than a tangible product or a new technology. An innovative mindset will seek to improve and change in order to increase value - be it a process, a product, or a business model. In an innovative organisation, innovation will not be the domain of a department or small group of people, but the responsibility of everyone,. It must, however, be recognized that innovations, whether small, incremental or radical, almost in all cases require efforts and resources, sometimes substantial in financial terms. Therefore, protection of the IPR for all such innovations needs to be a priority so that eventual commercialization can take place.
IPR issues in individual and organizational research
All intellectual properties get created through skillful utilization of the Knowledge Assets, comprising human intellectual capital – knowledge, information, experience and insight- that resides in individual human beings (individuals), assisted by the “structural” capital of organizations, namely the work environment and facilities, proprietary software systems, networks and supply chains. In deciding the ownership of the intellectual property rights of inventions or innovations, the interests of the individual scientists, inventors and innovators must be taken into account along with that of the research organization and organizations that may have been associated in the research efforts. Intellectual inputs in research activities may include previously protected knowledge ( background IP), the pool of knowledge existing in the public domain, tacit knowledge of the people involved, commercial knowledge of markets and consumers and other ‘non scientific and non-technical’ knowledge. A scientist, who worked on his own towards an invention, may apply and be recognized the owner of an IP. However, when an IP gets created in an organizational domain, the IPR normally rests with the organization (the Research Laboratory, the Academic Institution or the Company), where the inventors belong. It is normal practice, however, to get the names of the inventors included in the IP document (eg the Patent), along with the Organization named as the applicant and eventual owner of the property. The inventors often get a share or some benefits from financial returns on the eventual commercial utilization of the IP.
Role of IPRs in Research Collaboration
With the explosion and complexity of scientific and technical knowledge during the last fifty years, resources needed for production of new knowledge ( financial, intellectual, or organizational ) are, more often than not, too large for a single organisation. This is especially true for basic research, the output of which can seldom be translated directly into useful and financially profitable returns without extensive further work of upgradation. Such research programmes or projects are mostly funded these days by public, government or charitable institutions, and conducted in a collaborative mode in academic, government and commercial bodies. So are many of the upgradation programmes, in which expertise needed are more readily available in university and research institutions, rather than in the industry or the final utiliser organisations IPRs have the essential function of defining the relationships between those involved in these interactions, and new IP ground rules are being established in order to enable the system to work effectively and efficiently, delineating the interests, rights and responsibilities of all the participant organisations and individual scientists.
Outputs of the research work can entail IPRs of various kinds ( patents and other formal IPRs) and also enhancement of skills and forms of tacit knowledge to the participants. Even those taking part primarily for financial gains ( such as the contract research institutions) will surely look for wider benefits such as increased knowledge and expertise in technological and commercial spheres. Not all the outputs may be easily translated into marketable products, but can contribute to the overall capabilities and competencies of the Companies and other collaborating Institutions.
Collaboration agreements between participating organizations are generally complex legal documents that may also have to comply with the public funding conditions. The most contentious issues often are regarding the ownership of the rights on the IPs that get generated during the implementation of the programme or project and sharing of the returns due to the eventual commercial exploitation of the same. In most countries the Governments tend to be the primary provider of funding for the basic and applied research, which are mostly conducted in universities and research organizations. Since government funding is from public money, in most countries, including the USA until 1980, the IPRs of all inventions emanating out of such research programmes usually rest with the Government agency that funded the programme, and transfer and utilisation of these inventions are controlled by the government agency.
The situation in USA changed dramatically in December, 1980 with the passage of a legislation by the name of Bayh-Dole Act (Patent and Trademark act) that created a uniform policy among the many federal agencies that fund research. The act enabled small businesses and non profit organizations, including universities, to retain the title to inventions made under the federally funded research programmes.
The Bayh-Dole Act was especially instrumental in encouraging universities to participate in technology transfer activities. Prior to the enactment of Bayh-Dole Act, it was manadatory for institutions to give up the ownership rights of all Intellectual Property developed out of federally sponsored reserarch programmes in favour of the concerned government agencies. As a result, the U.S. government had accumulated 30,000 patents. Only approximately 5% of those patents were commercially licensed. The enactment of this legislation provided an incentive for universities to get involved in research programmes that promised creation of IPs with commercial potential, take initiatives to market their innovations and also persuade industry to make high risk investments in collaborative programms. Subsequent to the Bayh-Dole Act, there has been multiple increase in patent related activities in US universities and Research Organisations. Many new inventions, successfully transfered to industry, have contributed to advances in medical, chemical, manufacturing, communication and software industries. The products that revolutionalised the world in the last twenty five years, such as Internet Search Engines,faster modems, dignostic tests for breast cancer and osteoporosis, Lithium ion batteries used in mobile phones etc, were developed as a result of licencing of university innovations.
Scenario of IP, R&D and Emerging Knowledge Society in India
Historically, the awareness on intellectual property in India dates back to 1856, when the first India Patent Act was introduced. The act was modified and amended in 1911. After independence, a more comprehensive bill on patent rights was enacted in 1970, The “Patent Act 1970” was enacted against the background of the country’s imminent thrust on transformation from a poor “agrarian” economy to a planned “industrial” economy. The emphasis was on acquisition of technology from the developed world in order to build infrastructure in all sectors of the economy. One fall out of this was the omission of the provision for registering “product patents” in the 1970 act. Instead, the “process patents” were the primary instruments in protecting IP. Know-hows for proven technology products from developed countries were procured and adapted in Indian industry. In some cases, such as in pharmaceutical products developed originally abroad, process modifications associated with cost reduction and productivity increase were carried out and similar products manufactured in India. Not only was the awareness about IPR low among the scientific communities in the country, the licensing regulations and laws discouraged patent registrations from abroad. Interestingly, patenting activity appeared to have increased at a fairly rapid rate from 1950s up until 1970, when the new and weak patent law was implemented and there was significant immediate fall in patenting, especially in the areas of chemicals, food, rubber and plastic products.
The level of patenting activity in India remained at a low level until early 1990s, when India became a member of the World Trade Organisation (WTO) following the advent of economic liberalization. The agreement on Trade Related Intellectual Property rights (TRIPS) in the WTO necessitated harmonization of the Indian Patent and other IP laws with the international standards, and accordingly several new legislations and amendments in existing laws were enacted by the Parliament in India. This included the Trade Marks Act 1999, Designs Act 2000, Copyrights Act (Amendment) Act 1999, Geographical Indication of Goods Act 1999, and the Patents Act Amendments in 1994,1999, 2002 and finally in 2005. The 2005 Patents Amendments included the admissibility of Product Patents and a host of other provisions that were meant to motivate individual inventors, organizations and firms to seek protection of IPRs. The number of applications for patenting in India, which hovered around a yearly figure of around 3000 until 1994 ( compared with the US figure of 300,000) has risen to 17500 in 2004-05. This figure is expected to increase significantly in the future, especially after the 2005 amendment.
The trends in patenting activity over the years in India reflects the generally low intensity of the research and development work done in the country. Patents are in general the intermediate inventive outputs of R&D inputs. The extent of R&D investment at the industry level in India in terms of percent of sales remained less than 1.0 for the last fifty years. In contrast, many US industry firms have devoted between 2 and 4 percent of their turnovers on R&D every year. Beyond 1995, there has been some upward trend in R&D investments by manufacturing industry in India, especially in the pharmaceutical, biotechnology and chemicals sectors, but it is still way behind the international trends. With the advent of product patents, one would expect further increase in R&D intensity in these and other sectors in manufacturing. A small amendment to the Indian Patent law, incorporating the features of the US Bayh-Dole Act, could enlarge further the scope of industry academia research partnership.
One other significant point of note in Indian R&D scenario is the extent of participation of Government in R&D activities. The share of public investment has been consistently more than 75% in Indian R&D, compared to hardly 25% by industry. In developed countries the position in this regard is totally opposite, with industry spending amounting to 70% or more of the total national investment on R&D. The bulk of the public R&D in India is conducted in national labs, universities and specialized government agencies like space, atomic energy and defence, and commercial potentials of the research outputs or technologies developed in such institutions are uncertain in the short term. IPR awareness has been low until recently among the scientists as well as the administrators. The quantum of R&D investment vis-à-vis the Gross National Product (GNP) in the country has also been minimal (between 0.7 and 0.8 %) in this country, compared with 2.5 – 4.0 % in most of the developed nations. In fact, total national R&D investment in India in 2004-2005 has been estimated to be around Rs 21640 crores ( 0.77% of GNP, and equivalent to US$ 4.4 billions), which is less than the R&D spending by some of the multinational companies on their own. There were at least twelve Companies abroad, whose R&D budget in 2005 was in excess of $ 5 billions.
The onset of globalization, advent of WTO and the signing of the TRIPS agreement, all of which took place in the nineteen nineties, have however stimulated the Indian economy to transform itself into a Knowledge Economy in the 21st century. The educational system in this country is gearing up to face the challenges, with international recognition of excellence in quite a few areas of higher education. There are more than 300 universities and 17000 higher educational institutions producing approximately 3 million graduates that include 350,000 engineers and 200,000 IT professional each year. The R&D infrastructure in India boasts of nearly 3000 Scientific and Research Organisations (SIROs) where more than 100,000 scientists are researching in a variety of scientific and technological fields, including such advanced technologies as space research, satellite communication, atomic energy, supercomputing, nano-sciences and oceanography. The intellectual capital available in India has attracted more than 150 MNCs to set up R&D centers in this country. The number of patents filed in USA by the Indian entities of the MNCs over the last few years has crossed few thousands. The IT sector alone is likely to employ 2 million people by 2014, and is expected to account for 8-10% of GDP by 2008. There are signs of rapid acceleration also in the manufacturing sector.
In the expanding Knowledge Society in India, there is a clear demand for speeding up the process of identification, development, dissemination and uptake of innovations. An effective IPR system can go a long way in this regard. For example, the number of research and industry projects carried out only in the engineering colleges and universities in a year as partial fulfillment of requirements for completing undergraduate, post graduate and doctoral degrees in India is mind-boggling, and could be somewhere around 200,000 or more. Even if only a modest 5% of these have innovative ideas that have potential for societal and commercial application, 10000 patents can come out every year. Similarly, the Indian civilization which is at least 5000 years old consists of traditional knowledge and grassroot innovative practices, unknown to outside the user circles in rural India. Safeguarding the intellectual property rights of these grassroot innovators and traditional knowledge holders would be a first step in the process of bringing them out in the open.
Concluding Remarks
Managing the intellectual property rights of innovating individuals and organizations is an integral part of Knowledge Management, where apart from identification, creation and acquisition, sharing of knowledge is an essential component. True knowledge sharing can only happen in an environment of complete trust, transparency and equitable distribution of pecuniary benefits, if any. Not long ago, “knowledge was power” for people to make progress in life. But in a Knowledge Economy, where knowledge is often used as a strategic resource for gaining competitive advantage, sharing and integrating Knowledge are also key organizational processes. An efficient, effective and transparent IPR system can help in establishing such an environment. This is particularly relevant for the conversion of tacit knowledge residing with the experts and experienced people in organizations , grass root innovators and traditional knowledge holders, into explicit and documentable variety. A good IPR system will also be the faithful link between the academic freedom of the scientists, researchers and innovators, and their rights and privileges in work environment.
In 2002, President Abdul Kalam had unveiled the vision of India 2020, which called for developing an India that is free prom poverty, strong in trade, commerce, and science and technology, and a nation bustling with energy, innovation and entrepreneurship. There is little doubt that over the last decade or so, India has made significant strides in achieving that vision of becoming a truly vibrant knowledge society. With the new IPR regime in place,, an interactive knowledge management system can be envisioned with involvement of all the participants and stakeholders in the economy.
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Labels: 2006, Article for Conference on Knowledge Economy in India, IMI
