Open innovation's answer to the challenges of patent overpropertization

Abstract

In 2003, Henry Chesbrough introduced the concept of open innovation to the study of research and development. Open innovation teaches that technology advancement is best fostered through inbound and outbound R&D investment and the exchange of innovative knowledge. Patents, often the subject of technology transfer, are characterized as a bargain between the inventor and the state. Without propertization through the patent bargain, it is argued, market failure occurs. Despite their close ties, the relationship between open innovation strategies and the patent bargain is best described as both friendly and adversarial at the same time. Propertization of innovative knowledge through the patent bargain has, paradoxically, had the effect of blocking future innovation. Due to overpropertization, patent trolls and patent thickets have arisen that threaten to stifle advancement in new technologies. This Article discusses open innovation strategies that offer answers to the challenges of overpropertization. Where rent-seeking behaviors threaten future technologies, defensive pooling manages risk; where innovation-blocking thickets arise, private sharing regimes cross-license patents; and where innovative knowledge is best protected as confidential information, trusted intermediaries can facilitate exchange. In each case, open innovation is at work.