In replying to a compliment Isaac Newton wrote, “If I have seen further, it is by standing on the shoulders of giants.” He meant that most innovators build on the work of pioneers. Progressive drugs such as antibiotics, insulin and anti-blood clotting pharmaceuticals result from improving previous drugs. Sometimes inventions built on preceding innovations are more successful than the originals. For example, the Lotus 1-2-3 spreadsheet was built on a programme called VisiCalc, and Microsoft used the Lotus software to build Excel. Innovation is not limited to sequential invention, but often advances are achieved at the same time as the pioneer innovations. Complementary innovations are those where researchers take different paths to speed up and enhance the chances of achieving the desired results within a given time. A present-day example of complementary innovation is the emergence of commercially viable voice recognition solutions by researchers adopting many different approaches.
Patents on sequential inventions. When patents are too broad or too rigorously enforced, they discourage sequential researchers and slow down the entry of improved products. Companies that do sequential and complementary research counter this by making cross-licensing agreements for their patents. This may defeat infringement suits by pioneer products they used. There is no bar on patenting sequential or complementary inventions. Consolidation is the cornerstone of technological advancement.Imitations and innovations. Imitations pose a serious threat to the revenue earning prospects of the patent holder and are therefore subject to the enforcement of patent law. Simple or slightly altered imitations will usually be treated as infringing copies. However, imitation of a discovery can be socially desirable in a world of sequential and complementary innovation. The later innovator may come up with valuable ideas, which were not available to the original inventor. This normally hastens the process of commercial exploitation of the inventions. Although simple imitations are regarded as breaches of intellectual property rights and subject to sanction if they result in reduced profit for the original inventor, follow-on innovation, which may improve the prospects of future profit cannot automatically be looked at in the same way. There should be some form of protection to allow for innovation, even for complementary innovations produced in a sequential setting.
Crossing over competition bar. Every technology has inherent strengths and weaknesses. Consolidation allows for cooperation rather than conflict in competitive markets. This concept was used and put into practice as early as in the beginning of the 20th century when the Radio Corporation of America was formed. Key players in the then rapidly evolving field of radio broadcasting joined hands to mitigate the constant risk of infringing competitive patents. The birth of the first conglomerate holding many patents in its portfolio was the result of cross-licensing agreements entered into by all the patent holders. These cross-licensing agreements were contractual arrangements that allowed all the participating companies to make use of each other’s patents. These agreements also prevented the parties from suing each other for infringement of existing and future patents. These agreements became popular and were known as patent pools. Cross-licensing has deep roots in industries such pharmaceuticals, consumer electronics and advanced technology, which rely heavily on patents owned by individual companies. The situation becomes more complex when these companies hold large numbers of patents and their patent portfolios grow at an exponential rate each year. Cross-licensing allows the parties to enjoy the freedom they require to design and manufacture new and improved products based on reciprocal patent access.
Looking ahead. In allowing technology usage, cross-licensing works as a tool for correcting the disadvantages of patents owned by the pioneer of such technology. Stronger rights for sequential or complementary patents provide greater economic incentives to pioneer patent owners to cross-license them rather than to use legal rights to deny such use. Non-infringing imitations can diffuse the possibility of avoiding costly litigation.
Cross-licensing helps defuse conflict between competing patents by allowing the mutual use of the patents held by otherwise competing patent owners. However, in practice, identifying patents as either complementary or sequential is difficult. Taking expert advice at an early stage of research may be useful to identify the limits of freedom to operate outside the scope of the pioneer patents. Until then, standing on the shoulders of a giant patent may be a dangerous venture.
Complementary advances can be research or imitation By DPS Parmar
Article was 1st published in India Business Law Journal