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DIME Working Papers series on Intellectual Property Rights 91 - 95

WP91: Harnessing the ‘essential tension’ of design: The complex relationship between the firm and designer consultants

Andrea Filippetti, University “La Sapienza” of Rome and Birkbeck College – University of London

A central factor which characterizes design-related innovative activities is that a major source of knowledge – that is designers – is very often located outside the firm. This raises a central management issue for the firm and unavoidably generates a tension between designer consultants and the firm which I name the essential tension.

The aim of this paper is to shed some light on this complex relationship on the ground of the evidence provided by a multiple case study. The findings confirm that designer consultants can make a substantial contribution in enhancing firms’ innovation capabilities. We show that a better understanding of the types of knowledge that designers need for their activity is key. This affects the way designer consultants are integrated within the organizational structure of the firm, and it also impinges on the strategies put forward by firms to manage this relationship in order to gain a competitive advantage driven by innovation. Implications include the crucial role played by the product manager, the strategies to foster trust and to coordinate designers.

WP92: The role of design in firms’ innovation activity: A micro level analysis

Andrea Filippetti, Italian National Research Council – CNR - IRPPS, University “La Sapienza” of Rome and Birkbeck College – University of London

The empirical literature investigating the issue of the heterogeneity across firms has proposed the concept of innovation modes. This aims at grouping firms depending on a number of innovation characteristics. The role of design as a source of innovation has been largely disregarded.

The aim of this paper is to fill this gap as it i. seeks to identify the main characteristics of firms which rely on design for their innovations; ii. aims to bring the role of design within the framework provided by the literature on the innovation modes of firms. Design activity is predominant in firms characterized by: i. complex innovation strategy, and ii. intense interaction with the external environment. Investment in design it is associated with higher performance of the firm.

WP93: Shackling the Digital Economy means Less for Everyone: Why the DIGITAL ECONOMY ACT is bad for the music industry and the digital economy

Birgitte Andersen, University of London, Birkbeck College

This article debates the policy measures designed to curb P2P file-sharing on the Internet. In doing this, the article challenges the Digital Economy Act which was passed through the UK Parliament April 8, and entered into force June 12, 2010.

WP94: Incentives and Obstacles in the Patent Governance of UK ICT Firms

Ainurul Afizah Rosli, Birkbeck, University of London, UK

This paper explores how firms exploit the patent marketplace to organise their strategic value creation using different patent governance forms. The focus is on how firms use the patent marketplace (through buying, selling, licensing, cross-licensing or pooling) to realise specific forms of strategic value (related to financial and non-financial strategic aims). The patent marketplace is an institution where knowledge assets are exchanged for value creation. Therefore, understanding the functionality and efficiency of the patent marketplace is important for value creation. The case study - based on thirteen UK ICT firms – explores the firms‟ patent governance, their behavioural patent incentives and the market obstacles they have experienced. This paper shows that patents are exchanged through specific forms of patent governance (such as buying, selling, out or in-licensing, cross-licensing and pooling) in order to realise specific kinds of strategic value. However, institutional inefficiencies may hamper the value creation process. Therefore, the obstacles that prevent the governance within the patent marketplace from functioning smoothly are also explored.

WP95: Inefficiencies in Markets for Intellectual Property Rights: Experiences of Academic and Public Research Institutions

Birgitte Andersen - University of London, Birkbeck College
Federica Rossi - University of Torino and University of London, Birkbeck College

Universities' involvement in the use of formal intellectual property rights (IPR) such as patents and registered copyright has increased steadily in the last two decades. Mainstream arguments, embedded in economic theory and policy, advocating the application of IPR protection to academic research results are based on the view that IPR marketplaces work well and allow universities to reap significant benefits. However, evidence based research to justify or critically evaluate these claims is lagging behind.

Building upon an original survey of 46 universities and public research organizations (PROs) in the UK, this paper analyzes the quality of the institutions underpinning markets for patents and copyrights with respect to IPR transactions between 'universities and PROs' and the users of the academic research base (mainly firms, but also other public bodies). The inefficiencies in markets for patents and copyright which are analyzed in this paper - and which lead to underperformance of the IPR system – include: (i) IPR market failures with respect to: IPR and client search processes and IP value transparency; (ii) institutional failures with respect to enforcement and regulation; (iii) failures experienced in IPR price negotiation processes; and (iv) uncertainties reflected in the perception of the economic value of the IP and the relationship with R&D cost. The analysis pays particular attention to the role of IP governance forms (e.g. alternative types of licensing agreements) through which IPR exchanges take place.

We find that universities report a high degree of "market failures" when exchanging patents and copyright. They reject the assumption of perfect information or transparency with respect to accessing the economic value of patents and copyright. Furthermore, because of the difficulty in agreeing on the value of the IPR, there are substantial difficulties in the negotiation of the price, so that the market does not clear very easily. Universities consider "institutional failures" to be less problematic, although universities do report problems in negotiating the terms of the IPR contract, and with regard to cost and difficulty of enforcing the IPR, when using particular IP governance forms. In general, IP governance forms matter for the types of market obstacles that are encountered during IPR transactions.

While some inefficiencies could be reduced via interventions aimed at increasing the circulation of information and transparency in IPR markets, some other inefficiencies seem to be closely linked to the economic properties of knowledge and as such very difficult to reduce. Given the importance of widely disseminating university research outcomes, in order to foster innovation and economic development, the persistence of these inefficiencies suggests that these objectives may be more properly obtained by openly disseminating knowledge, rather than government policies encouraging privatization of academic knowledge as a best practice.




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