2006 IP Year in Review: Patchwork paradise

What were the major trends in intellectual property area in 2006? From our subjective viewpoint, we would like to suggest three.  

The first trend is also most significant from the European perspective: the lack of progress in the development of common IP policy for the European Union. Every proposals put forward by the Commission – whether for software patents or European patents – has been systematically checkmated either by the Council of Ministers or by the Parliament.

An optimistic view of this situation is that national governments consider IP too important to be entrusted to the Eurocracy. A pessimistic and probably more realistic appreciation is that for all the talk about knowledge economy and R&D, the European political class does not see it as a priority.

More generally, both in Europe and in the US, IP continues to be driven by case law and precedents rather by grand design or a Roman law of general principles. It remains a patchwork paradise for lawyers, consultants and large corporations.

Speaking about corporate IP brings us to the second major trend: it looks like electronics have displaced pharma and software as principal sectoral battlefield. The $600 million <a href="http://www.gefma.com/blogger/2006/04/auctioning-patents.html">ambush</a> of RIM by NTP and the ferocious multifront war in mobile telecommunications between Qualcomm and everybody else (Nokia, Broadcom, Texas Instruments) were the main episodes. The increased visibility of electronics reflects the continuing unbundling of design from production and the growing reliance on design as the main source of added value and competitive advantage.

This pre-eminence of electronics should not be taken to imply that pharma has become less dependent on IP, as shown by the European Patent Office's <a href="http://www.astrazeneca.com/pressrelease/5292.aspx">decision</a> in December  decision to invalidate one of AstraZeneca's patents on a blockbuster drug, Nexium. However, within this sector, IP is now closely integrated within the broader approach of regulatory risk management and mitigation.

As for software, there has been a marked shift away from proprietary to open standards, which now have been endorsed by previous champions of the proprietary approach: Microsoft and IBM.

More generally, and this is the third major trend, the open source movement continues to gain momentum, not only on the desktop but also within the enterprise as web-based architecture becomes more widespread. Open source is also spreading into other areas such as genetics (human genome mapping exploitation).

This progress is driven not only by the dedication of foot soldiers and skillful argumentation by open source advocates such as Lessig or Benckler, but also by the robustness of its business model. Open source software may be free but related services are not. They actually generate substantial revenues, as shown by IBM and Linux-oriented companies such as Red Hat and Novell.