Monday, February 08, 2010

My Davos remarks on IP

I had multiple chances to plug my ideas around a more open approach in Davos, and found a sympathetic hearing, given some exciting activity in the same area. Nike launched the GreenXchange, and the Young Global Leaders had a humanitarian patent licensing concept that seemed promising. My main talk was at a session on commercialization of university research. Here's what I said.

The underlying goal of spinning off university research is seeing that society actually benefits as much as possible from the immense investment we make in research. Commercialization is a proxy for societal impact: if it sells, it's a pretty good indicator of social value.

However, there is a problem with this: market failure. What if an innovation could be of great benefit to society, but doesn't make enough money? My favorite example is in the pharma area. Imagine two drugs. One would save 100,000 lives a year, but they are almost all poor people in the developing world. The other drug helps men feel - better about themselves. Which drug do you think a western pharma company will make? Hint: it won't be the one that saves lives.

I ran into this problem with my venture capitalists 25 years ago. We had invented the best character recognition available at that time, and it would have made a great reading machine for the blind possible. But, our investors vetoed the idea because it wouldn't deliver the financial returns we had promised them.

So, a key action to improve this market failure problem is to be open to licensing technology to social entrepreneurs. Let's encourage tech transfer organizations at universities (and government labs) to license their technology to both commercially valuable opportunities as well as socially valuable opportunities. Let's come up with ways to navigate the thicket of intellectual property to lower the transaction costs and lower barriers to using humanity's knowledge in humanity's interest.

Most of all, let's keep the balance in our approach to knowledge. We need to preserve the incentive of businesses to commercialize technology while allowing social applications to happen. This will need both strong voluntary action as well as public purpose exceptions.

If we take these actions, we'll greatly increase the chances that our incredible investment in university research will benefit all of humanity, not just the top ten percent!

1 comment:

Jonathan said...

Interesting post Jim. At The Social Investment Consultancy ( we are also interested in ways that social entrepreneurs and social enterprises can maximise their impact. We’re releasing results in March that will reveal that there is much work to be done in this direction!