the patent attorney as an indicator of innovation

M e a s u r i n g I n n o v a t i o n

MEASURING INNOVATION THE PATENT ATTORNEY AS AN INDICATOR OF INNOVATION

Stuart Macdonald and Bernard Lefang

Unable to share in the widespread enthusiasm for using patents as indicators of innovation, and concerned lest strengthening of the patent system is seen to make the patent a better indicator, the authors examine the advantages of what might become an alternative indicator of innovation - the activities of the patent attorney.

ENTER THE LAW For very many years, the patent has been used as an indicator of innovation, a use sanctioned by a need to know among those who demand such indicators, and a need to show among those who supply them. Reservations about the reliability of the indicator, largely on the grounds that propensity to patent can vary a good deal, and that there is many a slip be tween patented invention and innovation, are dismissed, generally on the grounds that no bet ter measure can be found. A stronger patent regime of the sort that has emerged in the United States would seem only to reinforce the determinat ion of those who spend their time counting and correlating. Yet, w h e n a patent becomes so valuable that it can be more desirable than innovation itself, and some- times even an alternative, accepting the patent as a reliable indicator of that innovation becomes an impossible test of faith. This paper is a mischievous attempt to explore the possibility of another indicator of innovat ion, though admittedly a less quantitative one. The role of the patent attorney in innovation has customarily been confined to patent matters, most obviously assisting clients in their applications for patent protection. This role appears to have been expanding of late, presumably because the patent itself has assumed a greater p rominence in innovation. Perhaps the activities of patent attorneys can take the place of the patent as indicator and reveal something of what has b e e n happening in innovation.

THE NEW SCOPE OF PATENTS It has long been the tradition of the patent system that only devices are patentable, not ideas. They must be novel, and useful. The arcane nature of patent classification, which bears little relation either to scientific and engineering disciplines or to industry sectors, testifies to this utilitarian tradition. It has become increasingly difficult to fit much modern invention wi thin these quaint categories, and so to argue that the patent system is stimulating the innovation that a modern economy requires. Consequently, pressure has mounted to extend the scope of the patent system and, indeed, other forms of intellectual property protection. The patenting of genetic material is one example; the extension

of the patent system to computer software is another. Copyright, providing protect ion for half a century or so, had previously been the device available for a creation of such eminently transient value. The Supreme Court in the US has recently ruled that though the algorithms of computer programs are not themselves patentable, a process which incorporates an algorithm in a computer program is. As a computer specifically built round an algorithm is patentable, so is any computer which can use the same algorithm, and so is the software which allows the computer to perform the algorithm - a logical, if legalistic, progression.

" ...... attorneys began to achieve software patents by expressing a software concept as hardware. By asking inventors to design hardware equivalents to their software inventions, the patent attorneys could patent these impractical electrical clones and, via embodiment equiva- lence, protect any software implementat ion utilizing the same concept. "1

One consequence is that any of the hundreds of techniques used to produce a new computer program may now have been patented, making life difficult for software designers, and busy for patent attorneys.

"k is thus now necessary to involve patent attorneys at every phase of program development ..... Software patents will put an end to software entrepreneursY 2

The establishment of the US Court of Appeals of the Federal Circuit (CAFC) in 1982 was in large part a response to the growing complexity of some of the new areas into which patents were entering. So complex were the issues that a specialist body was considered essential. Its impact has been to s t rengthen the patent system, an impact which was not entirely unforeseen, nor entirely unwanted. Between 1982 and 1987, the CAFC upheld 89% of district court decisions that patents were valid, compared with be tween 30% and 40% previously. 3 The consequence has been to increase the value of an American patent in as much as the patent is now very much easier to defend, or, in the hands of a competitor, very much harder to challenge. Inevitably, change in the law increasing the scope of patent protect ion and the value of a patent has increased the role of patent attorneys. In itself, this is of little consequence - except for

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patent attorneys. But the pa tent system is a balance be tw e e n conflicting interests and the new p rominence of the pa ten t a t torney seems to indicate that a shift has taken place in this balance. This is something which may have very serious consequences for innovation.

FROM INVENTION TO INNOVATION Society's desire for innovation has p roduced two arguments in justification of the patent system. Though they are not incompatible, they are se ldom presen ted together .~Both are roo ted in the supposi t ion that invention would not take place if it could be pur lo ined by anyone so inclined. The first a rgument emphasizes development : the pa ten t system gives an incentive to invent in that it allows the inventor to reap a reward from his invention, e i ther through developing it himself or by selling it to o thers for them to develop. The second argument is less cont ingent on deve lopment and emphasizes information: it is that a bargain has been struck be tween the inventor and society by which society grants p rope r ty rights, wi th which the inventor may do what he will, in re turn for giving society the information of his invention. In the first argument, society allows the inventor to make his infolaliation public: in the second, society demands that he make his information public. The first a rgument supposes pa tent information leading direct ly to innovation and that innovation is society 's reward. The second sees the pa ten t system allowing the contr ibut ion of private information to a vast social s tore from which the information for innovation may be drawn. In this case, information is society 's reward and innovation, which is wha t society really wants, emerges only from the use of this information and only indirect ly from the invention and the patent.

An adjus tment to the pa ten t system may affect not just its functioning, but also pe rcep t ions of the relat ionship be tw e e n the pa ten t and innovation. A s t rengthening of the pa ten t system favours seeing the benefit to society not in terms of making information available for innovation, but in terms of innovation itself. It follows that there is less interest in disseminating the information of invention further than is necessary to at tract in teres t in development . And, if the inventor is to be the developer, not even that far. There is less pa t ience wi th the argument that it is incumbent on the inventor, and the pa ten t system, to broadcast the information of the invention as widely as possible. The publ ic good arguments traditionally p resen ted to suppor t the dissemina- t ion of informat ion by pa t en t offices begin to sound increasingly out of tune wi th the times.

"Each pa ten t specif icat ion is a detai led disclosure of the invent ion and it is this aspec t of course w h i c h is par t icu la r ly valuable as a r ich source of t echn ica l information. "5

There has been growing accep tance in recen t years of the deve lopment model of innovation. In part, this is because of its essential simplicity, wh ich is we lcome in any model, but explanat ion also lies in the model ' s a t t ract ion to specific in teres t groups. For example , the be l ie f is not whol ly repugnant to scientists that, upon their efforts in basic science, depends all that occurs in appl ied science, in design, in product ion, in market ing and in wha tever o ther activities are encoun te red on the road to innovation. Nor do the

inst i tut ions in which such scientific endeavour takes place rush to oppose the not ion of l inear development; after all, there is no o ther argument to hand which so readily justifies incurr ing immedia te and cer ta in costs for dis tant and uncerta in benefits. Thus it is that universit ies have shown little restraint in their new enthusiasm for patents, regarding them as both per formance indicators of the progress they are making along the road to innovation, and as a means of generat ing revenue. By 1986, universit ies held almost 2% of US non-government patents. Yet, despi te some examples of outstandingly profitable university patents - Stanford will apparent ly make $87 million from the l icensing of one b io technology pa ten t 6 - it would seem that, overall, even the direct costs of patent ing exceed the profits. 7 In the longer term, the costs of constraining university research to fit the requi rements of the pa tent system may be much greater, measured in terms of the damage done to innovation by the neglect of unpatentable research and restr ic t ions on informat ion flow. From the pe r spec t ive of the British Technology Group, which specializes in exploi t ing university patents, this is not a problem.

"Our biggest compet i tors are not o ther agencies like ours. They are researchers talking to industry or giving their ideas away at conferences and so on. "8

It would not be unfair to include within the group which is more comfortable wi th emphasis on p ro t ec t ed development ra ther than the dissemination of information, those dependen t upon the patent system itself. It is much easier to justify their function on the grounds that invention makes a seminal and di rec t contr ibut ion to innovation than on the grounds that it makes only one contr ibut ion among many, and that indirect and uncertain. And thus it is that pa tent at torneys are among those who have a natural affinity for the deve lopment model. Such a model allows the pa tent a t torney to assume the role of guardian and nursemaid to the invention, seeing it through to the matur i ty of innovation. When the pa ten t system concerns itself wi th innovation, so too must the pa tent attorney.

NATIONAL SECURITY, COMPETITIVENESS AND THE PATENT ATTORNEY The qualifications, skills and expe r i ence of the pa ten t a t torney are in the law, and specifically the law relating to intel lectual p rope r ty in general and patents in particular. The talents most valued in bringing about innovation are whole- hear tedly commercial ; a vast range of them to be sure, but not a range in which the law has had any p rominen t place. While the function of the law is to serve the public interest , the funct ion of the individual lawyer is to serve his client. The information model of the role of the pa tent system in innovation leaves little for the pa ten t a t torney to do after the granting of a pa ten t - bo th the inventor and society benefi t from the wide dissemination of the information of invention. But t he d e v e l o p m e n t m o d e l has no p l a c e for such dissemination and values the pa ten t at torney's ability to prevent it.

"A company 's pa ten t lawyers can p ro tec t the company 's p ropr ie ta ry posi t ion wi thout giving away too much in the applicat ion process. "9

Indeed, it has come to be quite acceptable for even the

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Harvard Business Review, a journal be t t e r known for firing managers wi th innovatory zeal than for restraining ent repre- neurial activity, to dep ic t the commercia l prospects of an innovation entirely in terms of the s t rength of the pa ten t and the quality of the pa ten t attorney. ~° In such a mechanist ic approach to innovation, the manager is rep laced by the pa tent a t torney as the central figure. Among the factors which have encouraged pa tent at torneys to take on this new responsibil i ty for innovation is a very fundamental change in at t i tude towards national security, perhaps most evident in the US. Long before the demise of communism in the Soviet Union and Eastern Europe, it was plain that national securi ty was not simply a mat ter of military might, but also of technological strength. Thus, innovation, the source of technological s t rength and hence competi t iveness, was seen to be crucial to national security, and - following the deve lopment model - so was the pa ten t system.

"When intel lectual p roper ty rights are pro tec ted , i n n ~ vators are able to recover the costs incurred in research, p roduc t deve lopment and market development . This cost recovery .... is essential for stimulating the future research and deve lopment that is necessary to maintain America's compet i t ive edge." [emphasis added] 11

There has, of course, always been a connec t ion be tw e e n the ability of innovation to p roduce weal th and the capaci ty of a nation to defend itself. This is most obvious w h e n innovation is in military technology. But compute r and te lecommunicat ions technology have b lur red the dist inct ion b e t w e e n wha t is military technology and wha t is civilian. Moreover, the pace of civilian innovation has generally been much more furious than that of military. By the early 80s it had come to be apprec ia ted that it was as important to keep civilian technology from the enemy as it was military, and that the key to this technology was information rather than equipment . A pa ten t system which sought to disseminate information as widely as possible was singularly inappropri- ate.

" ..... control of design and manufacturing know how is absolutely vital for the maintenance of US technological superiority. Compared to this, all o ther considerat ions are secondary." 12

The not ion that it is in the inventor 's interest to retain information, that the benefits of innovation come from keeping information wi th in a country or a company, is ent irely in keeping wi th an approach to the pa tent system which sees its funct ion as securing information, and certainly not disseminating it. Innovative companies are those wh ich keep their information to themselves.

"The future t rend is to limit the amount of people wi th securi ty clearance and restr ict classified information on a 'need to know' basis. If there is no clear reason for an individual to know a secret, access to the secre t will not be allowed. ''13

Despite all the evidence that innovation requires a wide range of information from a wide range of sources, many of them outside the innovating organization ~4, there has long b e e n a t e n d e n c y to equa te loss of in format ion w i th diminished ability to innovate. Of course, information cannot be lost in quite the same way that o ther goods can be lost; it may be transferred elsewhere, but always remains w h e n c e it came. Loss may still be seen to be loss of compet i t ive

advantage, but this assumes that information easily finds its way to where it can be uti l ized for compet i t ive advantage. In reality, information transfer is easy, but information transactions - finding and acquiring the right information - are hard. Put a n o t h e r way, it is e x t r e m e l y easy to lose information, and ex t remely difficult to find it. Even codified information is hard to find and acquire, and the information of which innovation is composed is rarely neatly codified. This means that successful t ransact ions for the information r e q u i r e d for innova t ion t end to involve e x c h a n g e of information, information leaving the organization in re turn for o ther information entering. ~s Firms are dependen t on each o ther for information for innovation; they progress together.

This view of innovation is comple te ly at odds wi th that wh ich suppor ts a strong pa ten t system. From the powerfu l pa ten t perspect ive , it seems that a race is in p lace wi th the winning compet i to r taking all. 16 Thus, it makes sense for the organization to guard all its information lest a compet i to r use it to innovate first. This is totally in keeping wi th legal advice on organizational patenting. Moreover, it is in tune wi th a wide range of academic thinking and organizational practice. For example , e c onomis t s r egard the leakage of R&D information as an obvious loss to the firm. Managers see the depar ture of key employees and the information they carry wi th them to compet i to rs as clearly damaging to the firm's innovative capacity. Yet, because of the capacity of such loss to facilitate information transactions, to bring o ther information into the firm, it may wel l encourage innovation.

PRESSURES ON THE PATENT SYSTEM Some industries are very much more reliant on the patent system than others. Basically this is because invention in these industries is readily codified. 17 Thus, it can very easily overcome the difficulties normally associated wi th information transactions and be acquired and used by competi tors . Put another way, the prec is ion of a chemical or pharmaceutical pa ten t specif icat ion makes the pa tent part icularly easy to defend and thus enhances the value of the intel lectual property. 18 So it is that the chemical, and particularly the pharmaceut ica l industries, are heavy users of the pa tent system and ex t remely dependen t on it. While the patent system may serve these industries wel l because of the nature of thei r invention, it does not necessari ly serve o ther industries, those wi th less codified invention, quite as well. Some concess ion is often made to these differences in the e x t e n s i o n of p a t e n t t e rm af forded to pha rmaceu t i ca l companies to allow for the years that governments insist they spend testing their innovations, but this comes nowhere near to satisfying their declared requirements . Business strategy in these industries is thoroughly focussed on making the whole pa ten t system as powerfu l as possible. Certainly the pharmaceut ica l industry is qui te unashamed in its lobbying to s t rengthen the pa ten t system on the grounds that a s t rong pa ten t sys tem is essent ia l not only for pharmaceut ica l innovation but for all innovation. ~9

In fact, some industries seem to have thrived in just the oppos i t e pa t en t cl imate, the c o m p u t e r and e lec t ron ic industries being the most outstanding examples.

"A weak pa tent pol icy did not slow things down in the deve lopment of the in tegrated circuit and microproces-

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sor. In fact, it sped things up. The legal environment of the 1970s al lowed Fairchild, Intel and others to get their start, carrying the lesson that s t rong patents for every industry are not always good. "2°

In these industries, invention is not easily codif ied and the rate of innovation far outstr ips the leisurely pace of the p a t e n t p roces s . All th is has c h a n g e d w i th the n e w s t rengthening of the pa tent system. TI, for instance, once liberal in its cross-l icensing arrangements wi th compet i tors , has become part icularly litigious. Its most profi table p roduc t line is now pa ten t royalties.

"With cases lasting four years plus and running anywhere from $2 million to $10 million, compute r companies are spending as much t ime in the courts as they are in the laboratories. "21

The likely impact of this behaviour on innovation is obvious. As Lamberton has recent ly observed in the light of US enthusiasm for ex tending intel lectual p rope r ty rights, "much of the benefits of intel lectual p rope r ty rights go to those best able to cope with or live off the legal system". 22 It has even been suggested that:

" ..... a very small g roup of large high technology firms and t rade associations in the te lecommunicat ions , compute r and pharmaceut ica l industries was essentially responsible for the creat ion of the CAFC. The group bel ieved that a cour t devoted to pa tent cases would be t t e r represen t its in teres ts ] '23

Patent at torneys must surely be among those who live off this legal system.

CORPORATE STRATEGY AND INFORMATION COSTS It was once a regular complain t of pol icymakers that most companies in most industr ies had no technology strategy, much less a pa ten t strategy, and that technology played little or no part in their overall corpora te strategy. The new pa ten t regime in the United States, which has dramatically increased commercia l pressure to patent, has made pa tent pol icy central to strategy in many more companies. Not only are patents much more likely to be upheld, but the cost of infr ingement is to be based on lost profits ra ther than on lost royalty fees - t rebled when damage is deemed willful. All corpora te strategy must now take patents very seriously indeed. The most notor ious example of the strategic impact of another company 's pa ten t has been the $900 million in damages that Eastman Kodak recent ly paid to Polaroid. This was wha t is known as a ' land-mine patent ' - a pa tent granted long after a technology has become widely adopted. 24 In 1990, Gilbert Hyatt obta ined such a pa ten t on the micro- p rocessor after a 20[jzear struggle, something of an upset for a mature industry. 2~ Patent litigation increased markedly during the 1980s, apparent ly discouraging much of the venture capital which had previously funded new firms in Silicon Valley. Internationally, the change is evident in patents no longer being mere ly the esoter ic conce rn of the World Intel lectual Proper ty Organization, but central to the interests of the General Agreement on Tariffs and Trade. 26

A s t ronger pa ten t system, even if it were to genera te more innovation, is likely to increase the cost of that innovation. With greater s t r ingency a greater p ropor t ion of

the costs of innovation is the cost of the pa ten t system itself. Most obviously, the cost of avoiding infr ingement rises.

"Companies should not work on a new process or concep t wi thou t re ference to exist ing pa tent l i terature. Relevant patents may still be in force which, if ignored, could prevent the manufacture and market ing of the new concep t under consideration, it27

The information the pa tent system has accumulated is no longer seen as contr ibut ing to innovation, but as an obstacle to innovation. It becomes the responsibil i ty of the pa tent a t torney to help his clients avoid such obstacles.

"Corporate patent at torneys have s tar ted scrutinizing their companies ' pa tent portfolios and have become more reluctant to give R&D managers the go-ahead on a n e w idea or business for fear of dupl icat ing a pa t en ted product . "28

Any lengthening of the pa tent te rm - the perpe tua l demand of the pharmaceut ica l industry - not only increases the search costs of o the r firms, bu t also the risk of infringement.

" ..... inventions build on each other, and a long pa tent grant may have deleter ious effects on the incentives of o ther firms to engage in related research, for fear that they will be at the mercy of the original patentee. "29

The information in a pa tent specif icat ion is codified. Transactions and transfer are easy, but much more information is requi red before innovation can result. This is why licensing agreements nearly always involve the transfer of know how, often in a human container. There is growing pressure these days to increase the codificat ion of information. This comes largely from d e p e n d e n c e on information technology, a technology which can store, process and transfer codif ied information wi th ext raordinary efficiency, but which copes poor ly wi th the uncodified. There are obvious advantages in codifying as much information as possible. The p rob lem this entails are beyond the concerns of this paper , but the at tract ions of a pa ten t system which claims to be able to codify the information essential for innovation are obviously enhanced. In most industries, though, this is the sort of information wh ich makes least con t r i bu t ion to innovation. In the same way that an organizational information system which cannot cope wi th irregular, tacit, informal information is likely to deprive the organization of the very information it requires for innovation, 3° so a pa ten t system which copes splendidly wi th only codif ied information may depr ive socie ty of the o the r information it requires for innovation.

PATENTS AS INDICATORS This neglect of the o ther information requi red for innovation is evident in increasing rel iance on pa ten t statistics as indicators of innovation. Patent offices were often the main opponen t s of even a modes t use of their statist ics as indicators of innovation, arguing that they we re col lec ted for internal purposes and that the marked differences in the propens i ty of countr ies and industr ies and companies to pa ten t d is tor ted anything that analysis of the statistics might reveal. 31 Always, though, the pr imary objec t ion to the serious use of pa ten t statistics was that, at best, they measured invention and not wha t was really of much more impor tance



- innovation.

The at t i tude of pa tent offices to this use of their statistics seems to have softened, perhaps in response to its growing acceptance in pol icy circles. Policymakers have long sought a neat and convenient indicator of innovative performance. The change in at t i tude may also have something to do wi th the conven ience wi th w h i c h p a t e n t s tat is t ics can be obtained and manipulated now that so many pa ten t offices are storing their figures electronically. It may also be relevant that many national pa ten t offices are becoming commercia l organizations, much conce rned wi th demonstra t ing how relevant their services are - to innovation, of course, ra ther than merely to invention. Patent statistics are now widely accep ted as a valid indicator of the technological s t rength of nations, industries, and even individual companies. 32 Thus, the technological decl ine and r educed compet i t iveness of the US can be convenient ly measured in terms of the p ropor t ion of US patents taken out by foreigners. Much is made, for example, of the revelat ion that, by 1985, Japanese companies took out more patents in the US than American companies. 33

"The pa ten t data clearly show a major tilting of the technological balance away from the United States and toward Japan. This appears to be as much a [sic] consequence of decl ining or stagnating American tech- nologicai ou tput as of growing Japanese [sic] capabilities. "34

Yet, even at the national level, pa ten t systems fulfil different purposes: in Japan, the pa tents system is in tended to p romote the "rapid spread of technological know-how among compet i tors in a manner that avoids litigation.... ,35 This could hardly be said to be a goal of the US system. Under the Italian system, and many o ther national systems, there is not even a test for novelty. 36 At the industry and company level, vast differences in propens i ty to pa tent are now dismissed wi th impunity. 37

But academic debate over the validity of patents as an indicator ra ther misses the point: wha t has been accep ted in pract ice is not that pa tents merely indicate innovation, bu t that patents actually cause innovation, even that patents are innovat ion. Because p a t e n t counts are n o w taken so seriously, even as a benchmark of competi t iveness , there is pressure on employees in many organizations to create the patents to be counted, and - as in Japanese companies - employees may be offered incentives to pa tent as much as possible. 3~ Share pr ice rises on news that a pa ten t has been granted, and falls on the news that it has been challenged. Apart from giving a new meaning to the not ion of a pa ten t race, this emphasis on the patentable must be at the expense of the unpatentable. There is much research whose ou tput

cannot be pa ten ted and which is likely to be irtcreasingly ignored because it is ignored in pa tent counts. In as much as this information makes an essential contr ibut ion to innovation, the inc idence of innovation may actually decl ine as patent ing itself increases.

CONCLUSION The pa ten t system has always seemed to play a greater part in innovation than it really does. This is because its codified neatness provides we lcome reassurance in the real wor ld of messy and uncer ta in innovation. The new wor ld of patent- or ienta ted innovation offers a more dangerous illusion - that all innovation can be rendered neat. If the new order offers enhanced oppor tuni t ies for the pa ten t attorney, there are also likely to be dist inct advantages for those industries, those companies, those academics, those administrators and those pol icymakers who are comfortable wi th the idea of a neat and o rdered world. But for innovation as a whole, the new order can only bring problems. Innovation is not usually a linear deve lopment process. Anything which helps affirm this er ror is a de te r ren t to unders tanding of how innovation really does occur , and the re fo re to innova t ion itself. Innovation is not usually p r o m o t e d by restr ict ing the flow of information. It fe~ds off information. A recen t proposal p re sen ted to the US House of Representat ives would give the Commissioner of Patents and Trademarks responsibil i ty for regulating services offering assistance in the deve lopment of inventions, and would allow pa ten t a t torneys a privileged posi t ion in the provision of these services. 39 That patent attorneys, exper t s in claiming and maintaining p roper ty rights over information and in restr ic t ing its flow, now advertise themselves as able to turn invention into innovation is a useful indicator of just what , and h o w much, change has taken place.

"I'll be your quar terback and help you:

• conduc t a pa tent search

• build your business and manufacturing team

• sell your p roduc t in a test market

• file your pa ten t

Want help carrying your p roduc t to market? "4°

S t u a r t M a c d o n a l d a n d B e r n a r d Le fang

Management School University of Shefffield

Tel: + 4 4 114 222 3346

Fax: + 4 4 114 222 3348

E-mail: [email protected]

Footnotes Research for this paper was funded by the Economic and Social Resea rch Counc i l in the UK (g ran t n u m b e r L325253021).

1Steve Gibson, 'US patent office's softening opens floodgates for lawsuits', Infoworld, 14, 35, 1992, p. 36. ZLeague for Programming Freedom as quoted in Brett Glass, 'Patently unfair?', Infoworld, 12, 44, 1990, p. 62. 3Alexander E. Silverman, 'Intellectual property law and the

venture capital process', High Technology Law Journal, 5, 1, 1990, pp. 157-192. 4See Robert Merges, 'Commercial success and patent stan- dards: economic perspectives on innovation', California Law Review, 76, 1988, pp. 805-876. 5Michael Blackman, "raking patent information services to small and medium enterprises', Intellectual Property in Asia and the Pacific 40, 1994, pp. 44-67 (p. 47). 6Seth Shulman, 'Patent medicine', Technology Review, 98, 8, 1995, pp. 28-36.

Computer Law & Security Report Vol. 14 no. 1 1998 12 ©1998, Elsevier Science Ltd.


7Irwin Feller, 'Universities as engines of R&D-based economic growth: they think they can', Research Policy, 19, 1990, pp. 335-348. 8Ian Harvey as quoted in David Harvey, 'BTG: the mother of invention', Director, September 1989, pp. 121-122. 9Kenneth Labich, 'The innovators', Fortune, 6 June 1988, pp. 27-32 (p. 30). l°Ronald Rothchlld, 'Making patents work for small companies', Harvard Business Review, July-August 1987, pp. 24-30. llReport of the President's Commission on Industrial Compe- titiveness (1985) as quoted in Silverman, op. cir., fn.110. 12Department of Defense Science Board Task Force on Export of US Technology, An Analysis o f Export Control o f US Technology -- a DOD Perspective, Office of the Director of Defense Research and Engineering, Washington DC, February 1976, p. iii. 13C.W. Olney, 'The secret world of the industrial spy', Business and Society Review, 64, 1988, pp. 28-32. 14See, in particular, Eric yon Hippel, The Sources o f Innova- tion, Oxford University Press, New York, 1988. 15Stephen Schrader, 'Informal technology transfer between firms: cooperation through information trading', Research Policy, 20, 1991, pp. 153-170. 16Manfredi La Manna, Ross MacLeod and David de Meza, 'The case for permissive patents', European Economic Review, 33, 1989, pp. 1427-1443. 17See Richard Levin, Alvin Klevorick, Richard Nelson and Sidney Winter, Appropriating the Returns from Industrial Research and Development, Brookings Papers on Economic Activity, 3, 1987. 18Francis Tapon, 'A transaction cost analysis of innovations in the organization of pharmaceutical R&D', Journal o f Econom- ic Behaviour and Organization, 12, 1989, pp. 197-213. 19William Miller, 'Productivity and competition: a look at the pharmaceutical industry', Columbria Journal o f World Busi- ness, Fall 1988, pp. 85-88. 2°Robert Merges as quoted in 'Patent plague', Forbes ASAP Supplement, 1993, p. 62. 21Karen Howes, 'The shield and the sword', Satellite Commu- nications, 17, 1, 1993, pp. 6A-9A (19. 7A). 22Don Lamberton, 'Innovation and intellectual property' in Mark Dodgson and Roy Rothwell (Eds), The Handbook o f Industrial Innovation, Elgar, Aldershot, 1994, pp. 301-309 (p. 307). See also 'The harm of patents', Economist, 22 August 1992, p. 15. 23Silverman, op. ci£, fn. 62. 24Brett Glass, 'Modern users, fear not; it's just the sound of

patent attorneys', Infoworld, 14, 31, 1992, p. 81. 25Brett Glass, 'Patently unfair?', Infoworld, 12, 44, 1990, pp. 56- 62. 26Laudeline Auriol and Francois Pham, 'What pattern in patents? OECD Observer, 179, December 1992 - January 1993, pp. 15-18. 27Charles Moss and Ann Evans, 'Protecting ideas and new products', Industrial Management and Data Systems, Sep- tember - October 1987, pp. 21-24. 28Nancy Perry, 'The surprising new power of patents', Fortune, 23 June 1986, pp. 73-81 (p. 80). 29Richard Gilbert and Carl Shapiro, 'Optimal patent length and breadth', Rand Journal o f Economics, 21, 1, 1990, pp. 106-112 (p. 112). 30j.j. Eaton and D. Bawden, 'What kind of resource is information?', International Journal o f Information Manage- ment, 11, 1991, pp. 156-165. 31E. Sciberras, 'Indicators of technical intensity and international competitiveness: a case for supplementing quantitative data with qualitative studies in research', R&D Management, 16, 1, 1986, pp. 3-14. 32E.g. Daniele Archibugi, 'The inter-industry distribution of technological capabilities. A case study in the application of the Italian patenting in the USA', Technovation, 7, 1988, pp. 259-274. 33'Hidden agenda', Economist, 20 November 1993, p. 134-137. YiJ.D. Frame and F. Narin, 'The United States, Japan and the changing technological balance', Research Policy, 19, 1990, pp. 447-455. 35Donald Spero, 'Patent protection or piracy -- a CEO views Japan', Harvard Business Review, September-October 1990, pp. 58-67. 36Giorgio Sirllli, 'Patents and inventors: an empirical study', Research Policy, 16, 1987, pp. 157-174. 37E.g. Pari Patel and Keith Pavitt, 'A comparison of technological activities in West Germany and the United Kingdom', National Westminster Bank Quarterly Review, May 1989, pp. 27-42. 38Amram R. Shapiro, 'Responding to the changing patent system', Research Technology Management, 33, 5, 1990, pp. 38-43. 39A Bill to Amend Part I o f Title 35, United States Code, to Provide for the Protection o f Inventors Contracting for Invention Development Services, House of Representatives 2419, 28 September 1995. 4°Advertisement by patent attorney, Inventors" Digest, No- vember-December 1995, p. 45.


the patent attorney as an indicator of innovation

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