IP reforms need to spur innovation, economy

The current intellectual property (IP) rights and patent system is flawed and some markets are already in the midst of reforming the system, but authorities need to avoid making minor tweaks and look at how changes can better spur innovation and boost the economy, observers pointed out.

Foundation for a Free Information Structure's (FFII) general secretary Andre Rebentisch, for one, said the current mobile patents war waged by various companies such as Apple, HTC, Samsung, Google, and Microsoft, is an example of how "things only got worse" with the existing IP regime. The FFII is a not-for-profit organization registered in 20 European countries dedicated to the development of information goods for the public benefit, based on copyright, free competition and open standards, according to its Web site.

He noted that many of the FFII members operate in digital markets and, in these arenas, innovators are often confronted with "patent minefields". "In the software field, there are so many patents with a broad scope that infringement is often unavoidable," he said.

In a separate e-mail, FFII analyst Ante Wessels agreed the smartphone wars "seem harmful to innovation", as companies should be investing in research and development instead of lawsuits and litigation.

Wessels explained that the copyright law does not protect software authors' ideas and principles, just their expression in a work, as it aims to "preserve the freedom of expression for authors" and for them to reap the fruits of their work. However, the association is worried by the overlap of the copyright realm with the patent system as the latter is "getting abused to limit the freedom of expression for software authors", he said.

This is why Rebentisch said for IP rights to spur innovation, it is essential to have a solid legal definition of the term 'invention'.

"Inventions are different from ideas and principles underlying copyrighted works; they concern the use of controllable forces of nature to achieve a technical result," the executive elaborated.

Reforms should benefit economy, public
Rene Summer, director of government and industry relations at Ericsson, gave a slightly different perspective. He told ZDNet Asia in a phone interview that the "best way" to go about reforms is to look at how the proposed changes can benefit the economy, rather than continue the "old way" of using the system to pinpoint who or what is wrong, which then triggers tensions between conflicting parties.

For instance, the European Union's (EU) "flagship project" for IP reform--the Digital Single Market project--explores how IP rights can deliver innovation and growth, he pointed out. The reform, when completed, is expected to boost the EU's gross domestic product (GDP) by 4 percent, he added.

The United Kingdom, too, is evaluating and implementing some of the copyright reform recommendations made by an expert panel led by copyright professor, Ian Hargreaves, Summer pointed out. The proposals were made to ensure the country has an IP framework that supports innovation and growth in the digital age.

Quizzed on what Singapore is doing to improve its IP regime, a spokesperson from the Intellectual Property Office of Singapore (Ipos) said the regime is not stagnant as the agency continually reviews the system. This is to ensure the efforts of the inventors are recognized, she said in an e-mail.

The public should benefit from IP reforms through an increase in innovation and protection of IP rights, Wessels reiterated. This means that reforms need to "limit the granting or maintenance of patent rights where these are not justified by net benefits to the public". However, he acknowledged that even while patent offices are improving the quality of patents, it is "simply too costly to split wheat from chaff".

The FFII analyst went on to suggest that no having patent on software is the "best option" and noted that New Zealand is already working on such an approach.

However, one lawyer denied there's a need to change the current IP system.

Rob Bratby, managing partner of law firm Olswang, said in an e-mail that the existing system "underpinned over a century of starting innovation, growth and investment" and companies put in "billions of dollars, yens and euros" because they know the system allows them to generate a return on their investments.

While Bratby acknowledged that a system that grants monopolistic rights to one or a selected number of companies is capable of producing sub-optimal outcomes, he said most legal systems have antitrust laws that provide a sufficient counterweight to the IP system. This provides the right balance between providing the right investment incentives and dealing with potential problems, he added.