Owners of shared intellectual property agree to share patent rights with both each other and third parties. Alliances, patent pools, and other organizations may choose this route for many reasons, such as finding ways to work around overlapping intellectual property rights.

Intellectual Property Rights and Collaboration

Patents have exploded over the past 20 years across a variety of technologies, resulting in increased litigation between competition. Patent proliferation has resulted in issues with overlapping intellectual property (IP) rights, which is a concept commonly referred to as “patent thickets.” These patent thickets, or overlapping IP rights, make it difficult and expensive for inventors to extend their reach and for manufacturers to innovate products without overstepping their bounds.

Companies are increasingly realizing the benefits of intellectual property collaborations. For example, in 2001, sales based on pooled patents had an estimated value of over $100 billion. Despite being broadly defined, the information and communication technologies industry has developed most patent pools in the 21st century. Additionally, the biomedical research community has sought patent pools for a variety of biotechnologies, including those applied to animal cloning, cancer diagnoses, and HIV/AIDS treatments.

Advantages of IP Collaboration

There are many benefits of intellectual property collaboration. Patent pools, in general, allow multiple firms to draw on their own strengths to produce a complex piece of technology.

For example, companies like Microsoft, Intel, and Dell frequently collaborate to develop improved computer systems. Independent developers work with Apple to create iPhone mobile applications. Development collaborations such as these promote interoperability and investment schedules to spur new product releases at a breakneck pace.

In general, gaining the knowledge needed to produce cutting-edge technologies takes a lot of time and money. By taking advantage of another company's experience, inventors can develop new products faster and cheaper than they would if they had to start from scratch.

Cost-sharing is a major incentive for firms to partner up and collaborate. Each organization can leverage its own experience and explore new markets without fronting the entire cost of the project. This benefit is especially useful in industries such as telecommunications where the cost of a single project is beyond what most companies can afford.

To summarize, the advantages of collaborating on shared intellectual property include:

  • Sharing the costs of expensive projects.
  • Sharing development risks.
  • Sharing facilities and lab equipment.
  • Sharing industry experience.

Independent Licensing

Intellectual property rights affect competition and collaboration in different ways. Collaborative efforts can have drastic effects, and policymakers should draw on existing research to better map work dynamics.

One of the biggest lessons learned from economics is the requirement of patent pools to pursue independent licensing. Obtaining independent licenses benefits public interest in multiple ways:

  • It places a ceiling on fees, preventing patent pools from royalty stacking (or receiving separate royalty payments on each patented component), which would result in higher purchase prices for consumers.
  • It reduces wasteful inventive efforts.
  • It encourages alternative uses of patented technologies instead of restricting them.
  • It helps screen noncompetitive patent pools.

Independent licensing is valuable because it prevents harmful patent pools from existing, which would be detrimental to shared intellectual property.

Forms of Collaboration

Collaborations exist in many forms, including:

  • Designing houses.
  • Universities.
  • Working with suppliers and vendors.
  • Working with content providers.

If modern technology has taught us anything, it's that open communication and collaboration are key in innovation, which is essential for startups and corporations alike.

The nature of collaboration takes many forms depending on how many parties are involved, the timeframe, and the overall scope of the project. For instance, an external collaborator might focus on a narrow aspect of a project while others take a broader leadership role.

Collaborations are also important for completing interdisciplinary projects. One company might develop electronics for a product while another focuses on the software. In these cases, collaborators might work completely separate but communicate as needed to get the job done.

Ownership of Shared Intellectual Property

Intellectual property rights are granted to the inventor, but the inventor must be recognized as such to be credited. Who owns an invention is a complex question when a technology is created through collaboration. That's why all parties involved must agree to IP terms and conditions beforehand. Drawing up a thorough cooperation agreement is a must when sharing intellectual property.

If you need help understanding shared intellectual property, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.