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Intellectual Property - Complex Link Between Science and Business – A Eurocentric View Joseph Intellectual Property - Complex Link Between Science and Business – A Eurocentric View Joseph Straus, Munich World Science Forum Knowledge, Ethics and Responsibility Budapest, November 10, 2005 © J. Straus 2005 1

Overview • Growing Importance of IPR in the Global Knowledge Economy • Academe as Overview • Growing Importance of IPR in the Global Knowledge Economy • Academe as Generator and User of Inventions • US achievements and experience – a model? • Ubi es – quo vadis European Academe? © J. Straus 2005 2

IPRs - Cornerstone of Globalized Economy • Number of patent applications doubled: – USA: IPRs - Cornerstone of Globalized Economy • Number of patent applications doubled: – USA: 1988 -1998 – 260. 000 – 350. 000 [2003] – EPO: 1995 -2001 – 160. 000 [China: 2003 – 300. 000 for all forms] • Royalties paid for patent licenses in USA – 1980 – 3 Billion $ – 1990 – 15 Billion $ – 1997 – 100 Billion $ • Market value of US manufacturing industry – 1980 – Commodities 62% – 1998 – Commodities > 30% – 1998 - > 20% in cutting-edge technologies (Japan) © J. Straus 2005 3

[Academic] Science as Generator of IPRs & Innovation US Universities as Example • 1974 [Academic] Science as Generator of IPRs & Innovation US Universities as Example • 1974 – 177 Patents • 1984 – 408 Patents • 1994 – 1. 486 Patents [1. 000 Licenses granted] • 2003 – 15. 510 Invention disclosures [7. 921 US appl. filed] • 2003 – 3. 933 Patents granted • 2003 – 401 new companies formed [total number 4. 081] • 2003 – 4. 516 new licenses and options [total of 25. 979 active] • 2003 – 1. 310 billion $ adjusted gross license income [out of 10. 682 licenses & options] < 300. 000 new jobs • 2003 – $1. 25 billion running royalties on product sales © J. Straus 2005 4

[US] Universities New Player in the Game US PTO Patents Issued on DNA-Sequences in [US] Universities New Player in the Game US PTO Patents Issued on DNA-Sequences in 2000 • US Government (NIH, CDC, USDA, DOE) 472 • UC California System 399 • Incyte Pharmaceuticals 353 • John‘s Hopkins University 147 • Harvard University 140 • MIT 127 • Salk Institute 118 • Stanford University 108 • Human Genome Sciences 107 • Washington University (St. Louis) 90 © J. Straus 2005 5

Selected Important Innovations of University Origin • Vitamin D metabolics and derivatives – Univ. Selected Important Innovations of University Origin • Vitamin D metabolics and derivatives – Univ. of WI • Hepatitis B vaccine – Univ. of CA and Univ. of WA • Synthetic penicillin – M. I. T. • r. DNA h. GH – City of Hope Medical Center • Metal oxide process for taxol production – FL State Univ. • Prostate specific antigen (PSA) test – HRI/Roswell Park Cancer Institute • r. DNA Technology – Stanford Univ. & Univ. of CA • Dorcolamide (ophthalmic drop for glaucoma) – Univ. of FL © J. Straus 2005 6

The Basis of the US Development • Liberal patentability approach – “everything man-made under The Basis of the US Development • Liberal patentability approach – “everything man-made under the sun” patentable • Grace period & first to invent • Cheap patent granting procedure • Venture capital interested & available • Large domestic market © J. Straus 2005 7

Potential Reasons for US Developments • 1980 – Bayh-Dole Act: Allowed IPRs to be Potential Reasons for US Developments • 1980 – Bayh-Dole Act: Allowed IPRs to be retained by the recipient of public funds allowed granting of exclusive licenses • 1980 – Stevenson-Wydler Act: Introduced offices of research and technology applications – with all publicly funded institutions having budget < 20 Million $ • 1986 – Federal Technology Transfer Act: Requires exploitation of publicly funded research results through socalled Cooperative Research and Development Agreement (CRADAs) © J. Straus 2005 8

The Bayh-Dole Act Philosophy • Imagination & creativity national resources • Patent system facilitates The Bayh-Dole Act Philosophy • Imagination & creativity national resources • Patent system facilitates & permits the delivery of that resource to the public • Placing the management of publicly founded research results in the public interest • Then existing Federal patent policy placing the U. S. in peril in a time when innovation was becoming the preferred currency in international trade © J. Straus 2005 9

Lessons Learned from the US • Growing awareness of the macro-economic potentials of publicly Lessons Learned from the US • Growing awareness of the macro-economic potentials of publicly funded research • Growing awareness for the need of adequate legal framework along the lines of the US model • Penetration of research area by IPRs • Need to familiarize scientists with basics of IPRs © J. Straus 2005 10

Fundamental Dilemma • Scientists – users and creators of IP • Primary aim – Fundamental Dilemma • Scientists – users and creators of IP • Primary aim – creation and dissemination of knowledge • Main responsibility – general wellbeing & innovation • Justified claim – legal framework – IP & others – adapted to their needs – to the benefit of the society © J. Straus 2005 11

European Academe – Where do we stand? • Europe not an island of happiness European Academe – Where do we stand? • Europe not an island of happiness but part of a competitive world! • Academe co-responsible for Europe’s competitiveness • ‘You cannot have a healthy science in a sick economy’ [Sir Charles Carter - 1983] © J. Straus 2005 12

Responsibility of the Academe in the Global Competition • Generation & dissemination & appropriation Responsibility of the Academe in the Global Competition • Generation & dissemination & appropriation of knowledge • Citations in US human-genetic patents – 26 non-patent citations per patent – 10 non-patent citations per typical drug patent • Origin of citations – USA 62, 2% – UK 6, 4% – Japan 4, 8% – France 2, 9% – Germany 2, 5% © J. Straus 2005 13

Production and Appropriation of Knowledge • Ownership in US human-genetic patents – USA 71, Production and Appropriation of Knowledge • Ownership in US human-genetic patents – USA 71, 2% – Japan 12, 3% – UK 2, 8% – Germany 2, 5% – France 1, 8% © J. Straus 2005 14

European Academe – quo vadis? • Take up the challenge & responsibility – knowledge European Academe – quo vadis? • Take up the challenge & responsibility – knowledge & application of knowledge main assets of Europe in global competition • Adopt a critical but realistic approach and provide for same favorable climate towards IP as the US academe • Insist in conditions securing generation, dissemination and appropriation of knowledge, for instance © J. Straus 2005 15

European Academe – its needs • A flexible approach as regards patentable subject matter European Academe – its needs • A flexible approach as regards patentable subject matter – e. g. the stem cell technology • Introduction of a grace period • Harmonized and clear experimental use exemption • Adoption of a simple and cost effective Community patent • Adoption of EU legislation along the lines of Bayh-Dole, etc. at European level • Financial means to realize its potentials © J. Straus 2005 16

European Academe – quo vadis? • Realize that • ‘Understanding the interplay of ideas European Academe – quo vadis? • Realize that • ‘Understanding the interplay of ideas and economic growth should be an area of active economic analysis, which for so many generations has focused mainly on physical things. This work will not be easy. ’ [Alan Greenspan, at Stanford, February 2004] • Until that is accomplished - use the system to the best possible extent – press for its adaptation to the needs of scientific community © J. Straus 2005 17

© J. Straus 2005 18 © J. Straus 2005 18