INNOVATION, PATENTS AND ECONOMIC GROWTH - Innovation in the Biopharmaceutical Industry - page 76

in communicating benefits of IP to key stakeholders — particularly to the politi-
cians who make decisions on the patent laws. Consequently, in contrast to Japan and
the US, the EU lacks the high-level political advocates for IP. It is not surprising,
therefore, that bold statements on the importance of IP to European competitiveness
have yet to be translated to substantive action to create a strong IP infrastructure.
But, some EU countries, such as the UK, have recognised the serious challenges
of competing with countries such as China and India, which offer low-cost envi-
ronments for business. The UK has embraced a multifaceted strategy to compete
on “unique value and innovation” with the involvement of businesses, investors,
universities and the government to create an environment where innovation can
thrive and IP is valued (Department of Trade and Industry, 2003). As with the UK,
Germany and the Nordic Countries demonstrate good practice, but these are the
exceptions rather than the rule. In most other EU countries, policies that encourage
innovation and protect IP are poorly executed or not implemented. Consequently,
the extent of patent enforcement and the intensity with which IP rights are protected
widely vary in the EU — with substantial weaknesses in several member states that
need to be addressed.
For the life sciences industry — where IP generation, development and commer-
cialisation are particularly expensive and risky — weak IP infrastructure is coupled
with a reward systems through reimbursement which remains unfavourable, as the
EU increasingly relies on cost-containment regimes that do not adequately take into
account the risks and expense involved in innovation. Further, in this sector, there
are no linkages between the registering authorities which licence new pharmaceu-
tical products and the patent office: hence, creating opportunity for infringement of
IP rights.
Company Case Studies
Many companies have developed successful IP management strategies designed to
enhance competitiveness and generate higher revenues. We describe below some of
these approaches.
IBM
IBM learned about IP the hard way in the late 1980s, when it developed high
temperature super-conductors but applied for patents 10 months after its research
findings had been published. This led to IBM losing patent protection beyond the
US, but also gave its competitors the critical intelligence and the time to replicate
the work and to file patents to cover their own developments.
During the 1990s, however, IBM adopted a strategic approach to manage its IP
portfolio. Rather than using it as a defensive barrier to prevent rivals encroaching