European Science Open Forum: Public Participation in Risk Management Eskil Ullberg, IKU

1. RISK MANAGEMENT PERSPECTIVES ON IPR / PATENTING– Up-framing to include the ”dynamics” of economy European Science Open Forum: Public Participation in Risk Management Eskil Ullberg, IKU - Advising on Risk Management and Patenting

2. One agenda – three issues • IP aspects – What’s the patenting system? • Issue: economy – Patenting key to economic growth • Up-framing – better understand the ”dynamics” of economic and other issue– Here focus on the USE of technology and how to manage the RISKS and COST • Projects with potential public participation driven by technology and patenting • 3 patent oriented cases • 1 current technology/economic/health oriented (3G)

3. Issue 1: What’s the patenting system? • Societies and companies are interested in turning ideas in to commercially viable businesses –> management of risk • Economies needs commodities to function efficiently -> value of right upheld • In the knowledge based economy, new ideas, innovations are the intellectual capital • The patenting system turns [technical] knowledge into a tradable commodity

4. Why such interest in the patenting system? GDP (accum) Risk related to:  ”crop” – the land property dominates (DeSoto) Agri  2-3% 100% Products  5-20%  ”hardware” – the physical property dominates Services  80% 33%  ”knowledge”– the intellectual property dominates 1900 2000 Source: German Economy, Geneva Association

5. The maker of BlackBerry e-mail devices joins Microsoft and eBay in appealing orders to pay damages for infringing on patents tosmall firms. (Research In Motion) The Power of the Patenting System ”Level playing field” for large and small A small guy with a big idea ideally beats a big guy with a small idea. The property right holds infront of a court.

6. Patenting • Not just a legal issue – ”valid / not valid” • Affects business decisions to invest in product and service developments – major risk management tool • Funds new technology (from profits of products) • Economic importance to companies and whole nations – so important (or disputed) that it is part of the WTO agenda (TRIPS) • The economy and technology is a complex context today and needs ”up-framing”

7. Issue 2: Up-framing • Make the map as big as possible, but not bigger • Capture the systemic effects of your issue, in this case technology • The economic up-framing • The economic, or market dimension must be in there. • Technology ”begins and end” with money • Technology up-framing • Not only some application but ALL applications of a technology when looking at a phenomena • Example: ”3G” is between 2G and 4G, its wireless, its wireless internet, its global, its man/machine interface, its the biggest economic infrastructure since the steamships (global trade), railroads (goods), electricity (SMEs). Now services (and money) are rendered over the Internet. • Administrative up-framing • Its ”non-obvious” who is managing what when a new technology comes forth, especially if global use. Old institutions die/changed and are replaced by new.

8. A multiple-way, ”systemic”, look at technology Up-framing Other Other Technology development (benefits) Technology usage (risks) Technology Ownership = Economic aspects (financing through the patenting system)

9. Wireless – Not only about calling Communication between all objects (100Mps)

10. Risks - Manage them and get the benefits • Wireless technology application risks • Economic risks – efficiency but vulnerability • Security risks – your life, government secrets, etc. on the Internet • Health risks – hearing, stress, other

11. Up-framing and dealing with uncertainty • Risk and uncertainty – a systemic issue • An economic perspective • A technology perspective • A administrative or ”management” perspective • What’s uncertain? • Everything you can’t put a number on and believe it • Mitigate or manage • What mechanisms to ”absorb” risk • The state => puts more on private shoulders

12. Issue 3: Applications • Biotech • Software • Financial Services • Telecom (current case)

13. Case idea: Biotech and Patenting – Commercialization issue • Big discussion – property rights on AIDS medicines, etc • Biodiversity • Developing countries have most biodiversity* • The patenting system provides a tool to participate in the knowledge economy • The your assets into tradable commodities • KI case: • ”Turn researched knowledge into usefulness for all mankind” • This is done mainly through the commercialization process where patents play a critical role to manage the investors risks • US dominates this field of science • Could it be through the commercialization potential (the idea put into good use) that there is a science leadership? *TWAS , Third World Academy of Sciences

14. Case idea: Software – Industry issue • Big discussion – property rights on software • ”Open Source” movement = NO! • Computers, and software, part of every product/service today: Engineering, Design and Software. • Ex: Cars, washing machines, micros, etc • Patents needed to manage the business risk • All represent IP to be commercially possible • Patents, design protection • US Dominates research

15. Case idea: Financial Risk Management • Financial risk management and property rights on risk management techniques • ”Business method” and software related • Insurance industry: ”12 years behind in Europe if no patenting possible”* • Pension funds – best management of risk ”excluded” – 75% (?) of invested capital is pension capital • US Dominates here * SwissRe on current debate in Europe

16. Case Telecom: 3G roll-out in Sweden • 3G roll-out has: time-to-market problems, economic problems, health issues are raised, multiple institutions involved, people are shuffled from agency to agency => Systemic problem? • Important to be in the technology lead for Swedish industry • Technology has been ”the way out of poverty” for Sweden - Sweden among founding countries of the Paris convention 1898 • This needs application of technology in close collaboration with research. Essence of success in mobile technology (Ericsson – Telia – Research) • Now – health issues, regulatory demands come up to meet promised deadlines together with commercial issues (100b internet users on the horizon, 2 out of 3 users machines 2010 ) • Unsuccessful management of these risks and benefits will take the intellectual capital – and companies – out of the country • ”Framing” of the ”3G” issue in a historical, economic, administrative perspective and health issues

17. Summary – the economic point of view • Understanding ”the whole picture” essential to manage risks and benefits – up-frame to include the consumer (the public) • Much technology will not be developed without patents • Commercialization of your ideas as important if not more important to society than the research it self - here patents often play a critical role • Several project ideas where public participation can/will be used are suggested in this session on public participation in Risk Management • More inputs are welcome!

18. Thank you for your time! eskil.ullberg@iku.se www.iku.se

19. Ref. • WIPO papers on SPLA, www.wipo.org • US FTC report on ameliorations of the patent system • The patent system and competition, Josh Learner • Risk Management – from portfolio strategy to value creating systems strategy, Geneva Papers, July 2002 • Financial Risk and the patenting system, PROGRES, June 2004