Can Open Innovation Work?

Open innovation is simply when an inventor of any kind openly collaborates with an institution, individual or group. This is not new by any means but the internet has played a huge rule in redefining open innovation and open source material. Here are some of the latest reports on how open innovation can work without depriving the inventor of the credit and royalties.

future Is OpenThe four reports

The Future is Open: 2015 State of Innovation
(Thomson Reuters)
– looking at how companies such
as Samsung and Toyota have embraced open innovation (right)

Innovation without borders: Six best practices
to improve innovation success rates (Evalueserve)

– including case studies of companies such as P&G,
Clorox and Danone (below left)

Executing an open innovation model
) – focusing on the biopharma

Who Owns the World’s Patents?
– concluding that lack of transparency
about patent ownership impedes IP licensing (below right)

EvaueserveThe Thomson Reuters
report argues that there is indeed a trend towards
collaboration, driven by the pace of innovation globally: “By
leveraging that which has been done before and partnering with
organizations that may solve for one aspect of an invention,
companies are able to go to market more quickly and meet
consumer demand for faster innovation time cycles.” For
example, about 130 of every 10,000 patents filed by are done
jointly with an academic institution, and it ranks among the
top 25 innovators in nine of the 12 industries analysed.

But open innovation is not new, of course, and the
Evalueserve report identifies best practices based on
experiences of companies such as Unilever and Nestlé.
These include setting up dedicated teams, building innovation
networks and developing an organisational culture to support
innovation. P&G’s
Connect & Develop
programme is an oft-cited open
innovation success story: innovation from external sources
jumped from 10% to more than 50% from 2001 to 2008, and gave us
products such as Tide Pods and Crest White Strips.

Deloitte’s report argues that biopharma
companies, where a “closed, traditional model” accounts for
about 80% of products, might learn from other industries where
collaboration is more common. In fact, its analysis found that
open innovation products enjoyed a higher success rate than
closed-model products – but mentioned concerns about
IP rights as one brake on further take-up. “For biopharma
companies, OI seems to be the way forward, as it appears to be
a more cost- and time-effective way to bring drugs to market.
In fact, several key trends will likely continue to drive the
adoption of OI, especially at the most open end of the
spectrum,” writes the report’s author, Ralph

OROPOSo is open innovation now
set to soar across diverse industries? The final report
mentioned above provides a note of caution: “Given the historic
trend in licensing, is that a great deal more value could be
realised, if inefficiencies and uncertainties in the system
could be eliminated – by solving the problem of patent
ownership data accuracy.” ORoPO is aiming to tackle this
perceived problem by creating a global database of patent
ownership, and already has some large IP owners on board.

One point that comes across in all of these reports is that
effective open innovation requires engagement across an
organisation, including the senior management, research,
marketing and of course legal teams. Given the role played by
patents and other IP rights, the involvement of the IP team is
crucial, but are IP advisers (both in-house and outside)
willing and able to make open innovation work, or are they
still more comfortable following more traditional closed
models? And, assuming your organisation wants to promote open
innovation, what role should IP advisers play in implementing
and developing it?

These are some questions that we will be coming back to over
the next few months, and look forward to hearing
readers’ views.