31 October 2006

Around the world in patents

This month's international research roundup looks at patents, the deceptively simple method for earning money from ideas.

First stop India. India's Council for Scientific and Industrial Research filed 542 US patents between 2002 and 2005. With the cost of filing a patent standing at about $25 thousand, and maintenance costs of $4 thousand per year, it's no surprise that this feverish activity has come to receive scrutiny from a skeptical public.

Nature ran an editorial arguing that India's state subsidized program for registering US patents is being abused and having a detrimental effect on research. Successful patent applications have come to be used in leu of peer-review publications. They provide a short cut to promotion and grant success.

The Indian newswire teluguporta.com carried a story (September 7th) entitled "Public Money Wasted on Useless Patents". The story described a patent for a substance extracted from cow pee that purportedly conferred an antibiotic action. The claim was not supported by any experimental evidence.

Moving East to China. 20 Chinese delegates flew even further east to San Francisco on the 9th of October for a training course on intellectual property rights. The course was given by Berkeley's Haas School of Business, no less than a paragon of righteous money making.

The US, and Europe too, would like to curb infringements of their patents in China. Beyond platitudes about getting to know each other, the press release on the event mentioned the need to address "Chinese misunderstanding of US values and priorities".

Now let's spin the compass around to examine Europe and its West-ward gaze towards the US. Here the issue is not about policing patent infringements. It's about Europe's desire to replicate the US's success with making money from ideas.

What caught my eye recently was a report published by the EC in September about the benefits of intellectual capital reporting for small to medium sized enterprises (SME's). The EU is pulling hard on all the levers to help SME's. This particular was report gave the advice that "articulating intangible resources" (intellectual property) could drive value creation.

Unfortunately the report seemed to struggle to back the claim. It cited evidence that investors presented with information about a company's conceptual crown jewels were more likely to give the company a thumbs down, in the form of lower forecasts. And anecdotal evidence suggested that fund managers and financial analysts don't take the information seriously.

Keep pulling on those levers, everyone! After all, money makes the world go around.