The Australian Intellectual Property system is ranked in the top five systems globally.
Intellectual property remains an issue of national significance as Australia gears up to take its place in the ‘Asian Century’. Data shows the Australian intellectual property system is robust – as a nation our intellectual property system routinely ranks in the top five systems globally.
But our level of investment in intangible assets, which includes intellectual property, is far behind that of our tangible assets – things like roads, mines and buildings. In addition, although our innovation inputs - for instance patent filings - are high, our outputs and record when it comes to commercialising innovative activity could be better.
So what can we do to better support innovation and intellectual property in Australia? This was the central question that framed discussion at IP Australia’s recent IP Forum in Sydney.
Keynote speaker Christine Emmanuel, executive manager, intellectual property and licensing, CSIRO Operations, believes as a nation we could be better at talking about the value of innovation.
“We don’t have a good way of communicating value, as well as no way of talking about innovation in the language of the government.”
According to Emmanuel, this inability to adequately communicate around innovation is a problem when it comes to attracting investors to innovative projects, which is a reason why innovative businesses find it challenging to attract venture capital.
But importantly, as we resolve this and nurture our intellectual property system, we need to make sure we don’t give too much away.
“We need to have our scientists think about the value of innovation for our economy and our country. Scientists need to understand the value of their work from a commercial perspective. We seem to think scientists must have integrity and not bow to commercial pressures, but that’s nonsense. Both science and commerce should be going in the same direction. We need to teach our scientists to work on problems that will create value.”
Another keynote speaker, Scott Bouvier, a partner with law firm King Wood and Mallesons, suggests to generate better business outcomes from the innovation process, intellectual property advisers need to become better business advisers.
“Advisers need to broaden their role so that they understand the commercial context and to develop intellectual property within that context. Intellectual property advisers also need to be working with clients on commercialisation strategies,” Bouvier argues.
Nevertheless, another keynote presenter, Christine McDaniel, deputy chief economist, IP Australia, says we should not take for granted that our intellectual property system is well-functioning. The fact it’s possible to obtain high quality patents, which can be opposed and defended, within a transparent intellectual property system is a situation to which many countries aspire.
As to how or even whether our intellectual property system needs to be improved, McDaniel says “it’s a reasonable goal just to maintain the system.”
So what’s the place of government in encouraging investment in innovative activities? According to McDaniel, governments have a role in helping new, innovative firms enter the market, as well as in promoting innovation in existing firms.
Public sector involvement in innovation can take a number of forms – it can include support of ongoing research and development, acquisition of external knowledge through activities such as buying patents, as well as encouraging new business processes and new ways of organising people.
McDaniel says according to OECD figures, the Australian government is already a strong supporter of innovation. Data suggests sixty per cent of large firms receive support for innovation and twenty per cent of small firms receive government support to be innovative.
“But the question is whether we’re doing it the right way – how do we know whether we’re giving financial support to the right firms? It’s very hard to pick winners,” she states.
According to McDaniel, a new way of approaching this challenge is for governments to invest in performance-based innovation. So the idea is that if an innovative firm receives government funding, if it can demonstrate it is performing, it will qualify for further government support.
“But the challenge is how to measure performance – this is the big question,” says McDaniel.
She says there is also a role for governments in providing opportunities for innovative firms to be networked through trade shows, to assist in the collaborative process.
“Governments can help create the circumstances for firms to collaborate, but ultimately collaboration happens at the individual firm level.”
Emmanuel says as a nation we’re actually good at collaborating. “We do that well and to innovate you have to collaborate – no-one can innovate in a silo. Scientists are always sharing information at conferences and sharing information across universities, as well as travelling overseas to collaborate. So we’re seeing that activity – it’s just whether this translates into value.”
Bouvier says the intellectual property sector must work from more of a position in which intellectual property portfolios are created with the purpose of attracting investment.
“We need to understand investors’ drivers and look for collaboration based on intellectual property. By doing that we will be able to improve the services we provide to the sector and also improve innovative outcomes. Businesses need a mix of skills to be able to translate innovation into commercial results and advisers need the right skills to assist in this process.”
Fundamentally, says Bouvier, intellectual property needs to be properly structured so investors can securely invest. “Poor decisions about the way intellectual property is structured are very hard to undo and investment deals can die just on the terms of licenses.”
“We have undertaken the right steps to reform the industry. Our IP system is highly regarded. We have the right framework and what we need to do now is work more effectively within it,” he says.
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