Innovation, product development and patents at universities/Innovatsioon, tootearendus ja patendid ulikoolides.
Kartus, Raul ; Kukrus, Ants
1. INTRODUCTION
Innovation, information technology and knowledge-based economy are
nowadays in all political, science and economic forums high sounding key
words. Explosive development of information technology during the recent
decades has significantly influenced the development of innovative
products and their use in practice. Information products are playing
more important role in economy. Bringing innovations to market has not
been the main historical role of university researchers. Instead,
university researchers quite appropriately concentrate on basic science.
There is an eternal dilemma whether it is more important to publish
scientific papers or to file patent applications. As technologies have
grown more sophisticated and emerging industries have become more
high-tech, universities have become more important players in the
processes of invention, innovation, and commercialization [1].
Undoubtedly, patents are an indicator showing the competitiveness of the
products and technological processes created as a result of R&D
activities in the universities. In Estonia, first and foremost the
Tallinn University of Technology and the University of Tartu have the
researchers, material means and facilities for working out innovative
products the Estonian economy requires in order to ensure Estonia's
transfer to knowledge-based economy. According to the Estonian Research
and Development and Innovation Strategy 2007-2013 "Knowledge-Based
Estonia" the key technologies, supporting innovation, are
information technologies, material technologies, communication and
biotechnologies. National research and development programmes were
launched on the basis of the strategy for developing these key
technologies [2]. The term of innovation will be explained and a general
overview of the activity of patenting as an essential innovation
indicator at the mentioned two Estonian universities will be provided.
2. MEANING AND MODELS OF INNOVATION
Innovation is a concept that can be interpreted in different ways.
Innovation means different things to different people depending on
whether they are politicians, scientists, entrepreneurs, media or just
common people. In the context of "Green Paper on Innovation"
of the European Commission, innovation is considered as being a synonym
for successful production, assimilation and exploitation of novelty in
economic and social spheres. It offers new solutions to problems and
thus makes it possible to meet the needs of both the individual and
society [3]. Generally, innovation is divided into technological
innovations and non-technological innovations.
Technological innovations comprise new products and processes and
significant technological changes in products and processes. An
innovation has been implemented if it has been introduced on the market
(product innovation) [4]. Technological innovations may be classified
also as product vs. process, radical (basic or fundamental) vs.
incremental (improvement), and disruptive vs. sustaining (sequential
and/or complementary). Important types of non-technological innovations
that do not result from scientific and/or technological R&D, but are
often crucial for profitably marketing the products and services
resulting from the investment made in R&D are marketing innovation,
institutional innovation, and complementary innovation [5].
In order to harmonize the understandings of the nature of
innovation and to compare the countries on the macro level as well as
the enterprises and other institutions on micro level, nowadays the OECD
methodology, based on three manuals, is used. The Frascati Manual [6]
contains standard practice for surveys on research and experimental
development. The Oslo Manual [7] gives guidelines for collecting and
interpreting technological innovation data, and Patent Manual [8] is
intended to give guidance on the measurement of scientific and
technological activities using patent data as science and technology
indicators. According to the Oslo Manual (point 59), the knowledge-based
economy is an expression coined to describe trends in the most advanced
economies towards greater dependence on knowledge, information and high
skill levels, and an increasing need for access to all of these. R&D
and innovation are key elements in the knowledge-based economy.
[FIGURE 1 OMITTED]
In Fig. 1, one of the cognitive models of the process of
technological innovation is shown for better understanding of the nature
of the innovation (1).
3. TECHNOLOGICAL INNOVATION AND PATENTS
Nowadays, development of technological innovations is based mainly
on the system of intellectual property, especially on industrial
property. However, legal protection of the subjects of industrial
property, first of all inventions, plays an important role in the
industrial and innovation policy of industrially developed countries.
Patent systems are designed with the main objectives of promoting
innovation, development and commercialization of inventions, inducing
disclosure of an invention and enabling orderly development of broad
prospects [9]. As it is known, the laws of industrial property
protection are the sole laws enabling to create market monopoly. Patent
system and exclusive rights, given via this system, would not exist
without social agreement. Patent system is an agreement between the
inventor and the society, according to which the society gives the
inventor an exclusive right for the use of the invention for up to 20
years in return for making the subject matter of the invention public
[10]. Patent is a good measure of accumulation of national intellectual
capital. It represents one aspect of country's R&D effort. It
is a good approximation for technological sophistication [11].
Before 1990-ies many high-tech companies, mainly in the field of
information technology (IT), did not pay much attention to patenting
their developments. Globalization of the world economy and emerging
markets led to the need for protection of new products from the
competitors on both internal and external markets. The amount of ideas
due to the use of IT on a large scale by the modernization of existing
products and working out new products, which exceeded the possibilities
to develop them into products at once, led fast to the growth of the
numbers of patent applications in industrially developed countries [12].
Besides protection of the products, launched on the market, also
defensive use of patents has spread, even to that extent that a new term
"patent arms race" has been taken into use. It may be stated
that part of patents has the nature of the technology and part of them
is for "crafty lawyering".
The term "patent trolls" is also widely used. These are
firms, which do not deal with product development themselves to a great
extent, but exist mainly to buy other inventor's patents and
enforce licenses.
Despite the aforementioned drawbacks, patents as indicators of
technological innovation have certain advantages. Excluding trivial
patents and patents used purely for lawyering, those inventions, which
are expected to have a commercial value, are the clear outcome of
innovation process. Nowadays, the value of the patents lies in the fact
that they form a large number of public documents, on the basis of which
it is possible to make extensive statistical research to bring out, for
example, inventive activity in different technical fields, directions of
development, leading firms, research institutions, researchers and other
key persons in the universities or most prominent figures in the field.
Disadvantages of the patents as indicators are that patents measure
inventions rather than innovations. Not all inventions are patentable.
This is the case of software, which is protected only by copyright,
except in the USA. Not all inventions are patented. Firms prefer in many
cases to protect their innovations with other methods, such as
technological complexity (know-how) or other industrial secrecy.
Despite the fact that patents can be treated as an indication of
the efficiency of innovation process in different ways, nowadays their
existence is extremely important let alone that a patent portfolio of
sufficient size is required for a successful "patent arms
race".
4. PRODUCT DEVELOPMENT AND UNIVERSITY INVENTIONS
In case of university research, there is an eternal dilemma whether
it is more important to publish scientific papers or to file patent
applications in the innovation process from basic research until
experimental development [13]. International publications are without
doubt essential for the universities, because these are the main
indicators by accreditation. But a large number of references and
interest in scientific articles do not mean that the results of the
scientific researchers have novelty to the extent that they can be
protectable. Undoubtedly, patents are an indicator showing the
competitiveness of the products and technological processes created as a
result of R&D activities at the universities. Neither development of
new products nor sustainable cooperation with industry is possible
without patents. Moreover, competitive products have to be protected as
a basis for the establishment of start-up and spin-off firms. Although
patenting activity of the universities of the EU has increased, the
universities of the USA and Japan are still on the leading position.
According to the WIPO, top university applicants by the number of
published PCT international applications in 2010 were the following
[14,15]: 1) University of California--306 (2011-277); 2) Massachusetts
Institute of Technology-145 (2011-179); 3) University of Texas
System--130 (2011-127); 4) University of Florida--107; 5) University of
Tokyo--105; 6) Columbia University in the City of New York-91; 7)
Harvard College--91; 8) Johns Hopkins University--89; 9) Seoul National
University--86; 10) Arizona Board of Regents (governing body of
Arizona's public university system)--80.
5. PATENTING ACTIVITIES IN ESTONIA
As it was mentioned before, information and communication
technologies, biotechnologies and material technologies are technologies
considered key technologies for the economy of Estonia to which much
attention has been paid. These fields of technologies have been the most
important fields of technologies in the world for a long time from the
standpoint of innovation. In 2010, according to the WIPO, number of PCT
international applications, published in the field of digital
communication, saw the fastest growth--17.3%, (10 581 published
applications). This technical field accounted for the largest share of
total PCT applications, published in 2010. Almost every other field of
technology experienced a decline or modest growth. The sharpest decline
in patenting was seen in the field of telecommunications [16].
Scientific research has been carried out in the aforementioned key
areas in Estonia for the last 30-40 years. Therefore there are highly
qualified scientists in these areas and nowadays they have assembled
into two main research universities--Tallinn University of Technology
(TUT) and the University of Tartu (UT). Before the 1990-ies, the
universities had for their basic research and applied research an output
either in the Estonia or former Soviet Union industry as experimental
solution. It should be mentioned that, unfortunately, in Estonia there
is no industry for implementing key technologies to the extent to have
an essential impact on the economy. However, especially biotechnology
and material technology are areas, which require big investments for the
implementation of production and highly qualified work force, which are
nowadays clearly too demanding for the economy of Estonia. Taking that
into account, the universities prefer international cooperation to the
internal one in Estonia in the field of high technology.
Proceeding from the evaluation on the basis of the research on
innovation in the Baltic region, made by Technopolis Group to the EU
Commission in April 2011 [17], the small absolute number of patents and
the absence of patents in some fields suggests, firstly, that the
business sector in all three Baltic States is not internationally
oriented and, secondly, there is an absence of industries, or of R&D
performing firms, in some key fields. The low number of patents makes it
not possible to identify a technological specialization for these three
countries.
In Fig. 2, the number of Estonian patent applications and granted
patents, filed with the Estonian Patent Office in the years 2005-2011,
and in Fig. 3 the number of utility model applications and registrations
are shown [18].
In Fig. 4, European patents, enforced in Estonia, are shown. It
should be mentioned that the numbers shown are too low to call Estonia a
technologically developed country.
In Fig. 5, it can be seen to which fields of technology the
patents, enforced in Estonia in 2011, belong. It should be mentioned
that in class C enforced patents concern mainly pharmaceutical industry.
The rate of the enforced patents, belonging to the areas of key
technologies, is small, which may mean that there is little interest in
making investments in these fields.
[FIGURE 2 OMITTED]
[FIGURE 3 OMITTED]
[FIGURE 4 OMITTED]
In Figs 6 and 7, the number of patent applications, utility model
applications and PCT international applications, filed with the Estonian
Patent Office by TUT and UT during the period from 1996 until 2011, are
given. It can be seen that the absolute number of applications for legal
protection of inventions has been very low at both universities during
the whole period.
On the whole, from the patents granted on the basis of the total
number of 44 patent applications, filed with the Estonian Patent Office
by the TUT (17 patents) were still in force at the end of 2011. In case
of the UT, 12 patents were in force from the 36 filed patent
applications. The small number of patents in force reveals that it is
impossible to make use of the inventions or their long-term legal
protection in Estonia.
[FIGURE 6 OMITTED]
[FIGURE 7 OMITTED]
In Fig. 8, the number of published PCT applications of the TUT and
in Fig. 9 of the UT are shown. The data of the WIPO contain also the
patent applications that were not filed via the Estonian Patent Office
or were filed with a patent applicant from some other country. In Figs
10 and 11 it can be seen that at both universities the largest number of
patent applications have been filed in the fields of microbiology and
gene technology (patent classes C12N and C12Q). EP applications of both
universities are shown in Figs 12 and 13.
The number of European patents filed by Tallinn University of
Technology has been provided in Fig. 10 and the number of patents filed
by the University of Tartu has been shown in Fig. 13. It can be noticed
that the number of the European patent applications is low.
In case of the afore-given data it should be stated that these are
public data. Therefore it should be taken into account that due to long
backlogs, especially in the EPO and the USPTO, it is impossible to
evaluate whether the activity of patenting of the universities has
remarkably changed in recent couple of years.
Neither has the present research brought out the impact of the
inventions, the authors of which are scientists of the universities, but
in which the universities have not been mentioned as applicants or
co-applicants. The main inventions made by the employees of the
universities outside the university are created in the framework of
international cooperation or in start-ups.
[FIGURE 8 OMITTED]
[FIGURE 9 OMITTED]
[FIGURE 10 OMITTED]
[FIGURE 11 OMITTED]
[FIGURE 12 OMITTED]
[FIGURE 13 OMITTED]
Despite little experience in patenting, the other essential
problems, preventing the universities of Estonia from patenting, are the
financial ones. The average cost of an European patent is about 5100
euros [18]. Fee for the validation and annual fees for continued
validity are added. Possible expenditures on court disputes in case of
infringement of the patent or in case of making an opposition should be
taken into account [19]. Despite that, the high indicators planned by
the R&D strategy of Tallinn University of Technology for the years
2005-2015 [20] exceed significantly the actual achievements. Besides
evident overestimation of the possibilities, one of the reasons for the
low number of patenting of the universities of Estonia is the lack of
patenting strategy, which is mandatory at the universities of UK and
USA.
6. NEW DEVELOPMENTS IN PROTECTION OF INVENTIONS IN ESTONIA
EU Commission recommendation on the management of intellectual
property in knowledge transfer activities and code of practice for
universities and other public research organisations exist. According to
point 4 of this recommendation, universities and other public research
organizations are requested to be responsible for broad dissemination of
knowledge, created with public funds, by taking steps to encourage open
access to research results, while enabling, where appropriate, the
related intellectual property to be protected [21]. In case of Estonia
it should be taken into account that nowadays Tallinn University of
Technology and the University of Tartu are the sole multidisciplinary
scientific centres and therefore they are obliged to deal not only with
the key technological high-tech areas but also with other areas required
by the economy of Estonia in order to ensure sustainable socio-economic
development.
In case of start-up and spin-off enterprises, dealing with product
development, it is inevidently required that innovative products are
protected either by patents or utility models. For the time being,
taking into account too high patent fees, it is recommended to file a
utility model application with the Estonian Patent Office, especially
taking into account the fact that since 1 January 2012 the Utility
Models Act [22] has been amended. Making a state of art search during
the examination of the utility model at the Patent Office is new in
principle. The report of the state of art search is forwarded to the
applicant, who may on the basis of the report make amendments in the
application before the registration of the utility model to ensure
better protection of the utility model. The second amendment concerns
the licence of right. The licence of right is a nonexclusive license and
everybody may get it. The licence of right is granted mainly in case the
owner of the invention does not want or cannot use her/his invention
herself/himself mainly due to the lack of financial means. The licence
of right is particularly appropriate for the universities to
commercialize technical solutions, accompanying basic research and
applied research, which would otherwise not be used on a broader scale.
Start-ups also can use the license of right successfully.
7. CONCLUSIONS
In knowledge-based economy, innovation is predominantly based on
the legal protection system of intellectual property. Innovation is
successful production, research and use of new products (product
innovations) in social as well as economic spheres. Globalization of the
world economy led to the need for protection of your products from the
competitors. Patents as indicators of technological innovation enable
inter alia to find out the directions of development, the leading firms
and institutions of scientific research in a particular field. In
Estonia, the key technologies are the information and telecommunication
technology, biotechnology and materials technology, research of which is
concentrated mainly at the Tallinn University of Technology and the
University of Tartu. Arrangement of production in these fields (areas)
requires large investments. Therefore international cooperation has to
be preferred in the field of high technology. The analysis shows that
the number of applications, filed with the Estonian Patent Office, and
the number of issued patents in the years 2005-2011 are low. The ratio
of the enforced patents belonging to the fields of key technologies is
low, which means little interest in investing in these fields. The
number of patents issued to Tallinn University of Technology and the
University of Tartu is also low, because publication of scientific
achievements is preferred to patenting and patenting strategy does not
exist. Amendments to the Utility Models Act, enforced on 1 January 2012,
encourages to use the new kind of licence, the licence of right,
enabling the universities to commercialize their technical solutions.
doi: 10.3176/eng.2013.1.02
REFERENCES
[1]. Litan, R. E., Mitchell, L. and Reedy, E. J. Commercializing
university innovations: a better way. NBER Working Paper, April 2007, p.
3. http://sites.kauffman.org/pdf/nber_0407.pdf
[2]. Estonian Research and Development and Innovation Strategy
2007-2013 "Knowledge-based Estonia" (RD&I strategy).
www.hm.ee/index.php?popup=download&id=10648
[3]. Green Paper on Innovation. COM (95) 688.
http://europa.eu/documents/comm/green_papers/pdf/com95_688_en.pdf
[4]. OECD. Glossary of Statistical Terms.
http://stats.oecd.org/glossary/detail.asp?ID=1583
[5]. Kalanje C. M. Role of intellectual property in innovation and
new product development. WIPO
http://www.wipo.int/export/sites/www/sme/en/documents/pdf/ip_innovation_development.pdf
[6]. Frascati Manual. The measurement of scientific and
technological activities. OECD, 2002.
http://browse.oecdbookshop.org/oecd/pdfs/free/9202081e.pdf
[7]. Proposed guidelines for collecting and interpreting
technological innovation data--Oslo manual. OECD/EC/Eurostat, 1996.
http://www.oecd.org/dataoecd/35/61/2367580.pdf
[8]. The measurement of scientific and technological activities
using patent data as science and technology indicators. Patent Manual.
OECD, 1994. http://www.oecd.org/dataoecd/33/62/2095942.pdf
[9]. Economic study on patent backlogs and a system of mutual
recognition. Final Report. London Economics. 2010.
http://www.ipo.gov.uk/p-backlog-report.pdf
[10]. Kukrus, A. and Kartus, R. Toostusomand ja globaalmajandus.
Kulim, Tallinn, 2008.
[11]. Shodjai, F. Science and technology indicators and a catalog
of major S&T indicators of Canada.
http://www.shodjai.org/foad/st_ind.fm.html#FN4
[12]. World intellectual property indicators - 2011 edition.
http://www.wipo.int/export/sites/www/
ipstats/en/wipi/pdf/941_2011_section_a.pdf
[13]. Kartus, R. and Kukrus, A. Innovation, product development and
patents at universities. In Proc. 8th International Conference DAAAM
Baltic Industrial Engineering. Tallinn, Estonia, 2012. Tallinna
Tehnikaulikooli Kirjastus, 2012, 477-482.
[14]. World Intellectual Property Indicators--2011 edition. WIPO.
http://www.wipo.int/export/sites/
www/ipstats/en/wipi/pdf/941_2011_section_a.pdf
[15]. The International Patent System 2012. PCT Yearly Review. WIPO
Economics & Statistics Series. WIPO, Geneva, 2012.
[16]. International patent filings recover in 2010. WIPO.
http://www.wipo.int/pressroom/en/articles/ 2011/article_0004.html
[17]. Innovation in the Baltic Sea Region. Final Report to the
European Commission, Directorate General Regional Policy. Technopolis
Group, 2011-http://www.interact-eu.net/downloads/
4445/Study_Innovation_in_EUSBSR_07.2011.pdf
[18]. Aastaraamat 2011. Patendiamet, Tallinn, 2012.
[19]. Fees and costs. How much does a European patent cost? EPO.
http://www.epo.org/service support/faq/own-file.html#faq-199
[20]. Kukrus, A. and Kartus, R. Economic and legal aspects of the
patent litigation in the European Union: developments and perspectives.
In Discussions on Estonian Economic Policy. Berliner
Wissenschafts-Verlag, Mattimar, 2011.
[21]. TUT research and development strategy 2005-2015.
http://www.ttu.ee/research-and-development-office/tut/
[22]. Commission Recommendation on the management of intellectual
property in knowledge transfer activities and Code of Practice for
universities and other public research organisations. C(2008)1329,
Brussels, 10.4.2008.
http://ec.europa.eu/invest-in-research/pdf/ip_recommendation_en.pdf
[23]. Riigi Teataja, 28.12.2011, 10.
(1) According European Commission information 2006/C 323/01
"Community framework for state aid for research and development and
innovation", research categories are defined as follows:
fundamental research, industrial research, experimental development.
Received 4 December 2012, in revised form 15 February 2013
Raul Kartus (a) and Ants Kukrus (b)
(a) Estonian Patent Office, Toompuiestee 7, 15041 Tallinn, Estonia;
raul.kartus@epa.ee
(b) Department of Public Economy, Tallinn University of Technology,
Akadeemia tee 3, 12316 Tallinn, Estonia; ants.kukrus@tseba.ttu.ee
Fig. 5. European patents by IPC enforced in 2011.
H-ELECTRICITY 4.75%
G-PHYSICS 3.75%
F-MECHANICAL ENGINEERING 4.25%
E-FIXED CONSTRUCTIONS 4%
D-TEXTILES; PAPER 1%
C-CHEMISTRY; METALLURGY 39.50%
B-OPERATIONS; TRANSPORTING 10.08%
A-HUMAN NECESSITIES 32.67%
Note: Table made from bar graph.
