The Voice of Innovation : IP, Competition

U.S. Chamber Report Raises Concerns about China's Innovation Policies

DELevin — Tue, 03 Aug 2010 22:02:00 GMT

Last week, the U.S. Chamber of Commerce published an interesting -- and attention-gathering -- report: "China's Drive for 'Indigenous Innovation': A Web of Industrial Policies."

This report is well worth perusing: the issues that it outlines are likely to engage the technology sector for years to come. Like other nations -- the U.S. included -- China wants to promote domestic innovation. But many companies in the U.S. and Europe, as well as the U.S. Chamber of Commerce, have raised concerns that China's policies to promote "indigenous innovation" may go too far. These policies threaten: to exclude or hamper foreign competitors; to compel foreign companies to transfer valuable intellectual property to China; and to favor China-developed innovations in patent disputes and standards development. It may be that China's policies will run counter to its obligations under the World Trade Organization.

U.S. policymakers have been meeting with Chinese trade officials to discuss this issue. But the U.S. Chamber report cautions that "this is not just another run-of-the-mill China policy dispute." In addition to problematic "indigenous innovation" policies, software piracy continues to be widespread in China. In response to the Chamber report, a Chinese official told the AFP that, "China will further strengthen IPR [intellectual property rights] protection, including that of foreign companies, exactly because we encourage homegrown innovation." It remains to be seen what steps exactly will be taken on this front.

You can also find coverage of the U.S. Chamber report in the Wall Street Journal and in Computerworld.

A Story about IP, Innovation, Research, and Competition

DELevin — Tue, 15 Jun 2010 16:47:00 GMT

That post title above is a bit of a mouthful, but what I'm really going to talk about is video game consoles. The Voices for Innovation community is more focused on the enterprise and SMBs, but I think there are some interesting business and innovation lessons to be taken from the video game console marketplace.

This week is the Electronic Entertainment Expo (E3), and Microsoft announced the official name of what was Project Natal. It is now called "Kinect." This is the motion-detection add-on for the Xbox. You can play games by just moving around (waving your arms, running in place, etc.), no controller required. I haven't demoed Kinect, but reports suggest that it is pretty remarkable -- a leap forward for what is a pre-historic practice, playing games. In time, this technology in some form will work its way into businesses and the larger culture, but for now, it's just for fun (and profit, Microsoft hopes).

And what drove this innovative technology to be developed and enter the marketplace? Three answers: the intellectual property system (patents), research, and competition. Let's briefly take these topics in reverse order.

Competition: A few years ago, Nintendo released its market-changing video game system, Wii, with its motion-detection controller. Nintendo had been on the top of the video game world, but it had been outcompeted by Microsoft's Xbox and the Sony PlayStation 2. Rather than throwing in the towel, Nintendo rolled up its sleeves and out-innovated, at least for a while, its competitors with the controller. It didn't match the other next-generation consoles' hardware, but the Wii controller greatly grew the video game marketplace. It was not a zero-sum game. It is worth noting that Nintendo, headquartered in Kyoto, Japan, began in the 19th century as a maker of playing cards. This is a company that has a multigenerational, institutional association with game-making, and it has succeeded on this core competency, both in technology and offline (e.g., Pokemon). To compete with Nintendo, especially for casual gamers, Microsoft turned to its research arm.

Research: Microsoft has long made substantial investments in R&D (heading toward $9.5 billion for its 2010 fiscal year). It not only extends and enhances its product line-up, but it funds Microsoft Research, which operates in regions around the world. Many of the projects at Microsoft Research have no immediate commercial application. In some cases, Microsoft licenses out technologies developed by Microsoft Research to other companies and entrepreneurs. The gesture-recognition technology of Kinect was first developed by Microsoft Research.

Intellectual Property/Patents: Via international patent systems, Nintendo has the exclusive right to commercialize (including by licensing) its patented technology for a set period of time (usually 20 years). Thus far, it has successfully defended legal challenges to the Wii patents. Nintendo's investment in the R&D that produced the Wii now pays off because of patent protection. Kinect enjoys similar protection, with Microsoft filing patents related to the technology. Without the patent system, there would be no Kinect and no Wii.

So, in a nutshell, the trifecta of competition, research, and IP are fundamental to driving innovation. Today, the example comes from gaming. Tomorrow, the story could come from clean tech, health IT, or some other innovative arena. For a successful marketplace with innovation, we need to maintain and strengthen patent systems -- not weaken them, as some argue.

New Website with Technology Policy Papers by Leading Academics

DELevin — Thu, 07 Jan 2010 21:16:00 GMT

I just got a heads up about a new IT policy website called "Technology-Academics-Policy" (TAP). If you want to take a deeper dive into policy discussions around intellectual property (IP), competition, privacy, security, etc., this is a great place to begin. A group of dozens of academic experts will be rotating blog posts, and the site synopsizes numerous academic papers. Here is an excerpt from the site's own description:

The TAP Web site is sponsored by Microsoft. Microsoft respects academic freedom and is dedicated to advancing the dialogue on issues affecting the global IT industry, economies and society.

Technology – Academics – Policy (TAP) is a forum for academics leading the dialogue on the impact of technological innovation in the following areas:

    * intellectual property, patents and licensing
    * cloud computing/software + services
    * competition policy and antitrust
    * economic growth and the knowledge economy
    * privacy and security

***

A reminder: You can follow VFI on Twitter at http://twitter.com/vfiorg. You can follow me, less frequently, at http://twitter.com/techdel. TAP's Twitter handle is http://twitter.com/tapolicy.