Innovation and Intellectual Property in the Digital Age

The notion of intellectual property is at the core of technological innovation, economic growth and industrial policies. This research project focuses on the challenges that digital technologies and culture pose to the notion.

The introduction of 5G and the development of the Internet of Things (IoT) impact a wide range of industries and existing business models, and present a whole new set of challenges related to safety, privacy, spectrum allocation, public infrastructures and transportation that policymakers and regulators need to address to safeguard innovation, investments and citizens’ welfare. Confronted with the issues that arise at the intersection of technology, innovation and intellectual property law, the broad research question that this project will tackle is: how to deal with the perceived clashes between new technologies and existing IP frameworks?


Topics

Valuation and Licensing of Standard Essential Patents

The first area of research focuses on licensing patents that are essential to standards (Standards Essential Patents, SEP). With the take-off of many 5G verticals, the crucial role of standards has become more widely acknowledged. With respect to IoT, for example, a recent sector inquiry conducted by the DG COMP of the European Commission signals as a serious problem the lack of interoperability in the consumer IoT sector due to the prevalence of proprietary technology, leading to the creation of “de facto standards”, in particular with respect to voice assistants and operating systems.

Creating a framework for the IoT where heterogeneous devices and technology can be integrated requires interoperability across products, applications, and services, for which global standardization of the IoT is the only solution.

Notwithstanding the generalized recognition of standards as the invisible foundation of the digital age (see also the Standardization Strategy presented by the European Commission in February 2022) the valuation and licensing of SEP continues to be one of the most contentious issues in contemporary intellectual property law and innovation and competition policies’ debates, making this research line still extremely actual and relevant.

In this context, since the regulation of standard-essential patents has increasingly attracted the attention of policymakers all around the world, the research team will follow and analyze the expected evolution of the intellectual property framework related to standard-essential patents in the European Union and abroad.

Organisation of Innovation

The second area, crucially interrelated to the previous one, focuses on the organisation of innovation, referring to the processes through which ideas and knowledge flow from R&D organizations to the marketplace through technology transfer and commercialization of innovation. The analysis focuses, in particular, on the comparison between two main modes of innovation that seems to dominate the panorama of the digital economy: multi-sided platforms on one side, and Standard Development Organizations (SDOs) on the other.

Platforms are organizational solutions for connecting groups of economic agents that cannot efficiently and directly coordinate their activities, but at the same time are linked by significant externalities. The crucial feature of their technological architecture – i.e., modularity – enables the creation of innovation ecosystems where the innovative effort is divided between a stable core of the system (generally the platform itself) and its

periphery (favouring decentralization as an essential element of the innovation ecosystems).

Standard Development Organizations (SDOs) are meta-organisations whose role is to enable the coordination among various and different organisations/companies in the creation and commercialization of new technologies. SDOs are sitting between two sides: (i) the technology contributors, i.e. the innovators that provide the technologies, frequently patented, that define the standards, and (ii) the standard implementers, i.e. the firms that manufacture and distribute in the market products and services embodying the standard.

Among the dimensions for comparison between the two models, a relevant element is the pricing of innovation. As for all dual (or multi) -sided platforms, reaching the right balance between the prices across the sides of the platform is crucial for maintaining members’ active participation, for the value of products and services provided by and, all in all, for the success of the organization itself. In the case of SSOs, these “prices” are the policies that determine the costs of and incentives to participation, especially insofar as they determine or at least influence the future economic remuneration of the innovation. In the case of platforms, the leading firm, acting as network orchestrator, is able to influence the variety and depth of the innovation process by opening up more platform resources (such as APIs), and by offering more favourable standard licensing agreements to developers. Innovation activities, therefore, as well as the cost of possible failures, are moved outside the core, leaving the profit from possible successes mainly to the latter. The FRAND pricing process at the centre of the SSO organized innovation promises and requires a more balanced equilibrium among participants.

The implementation of these different ways of pricing innovation, together with other relevant dimensions for comparison, namely transparency and accountability and competition and antitrust issues, enable an assessment that is particularly timely for the future of the digital economy. The evolution of the role of big tech in the digital economy, with their entry into new markets, and, at the same time, the recent evolution of the regulation towards them, on a global scale, will offer to this research line new elements for enriching the analysis.

Economic, Legal and Business Implications of General Purpose Technologies

The third area of research focuses on the economic, legal and business implications of General Purpose Technologies (GPTs), with a specific focus on the advancement of 5G to power the “Connected Intelligent Edge” and enable the cloud economy. The area will analyze the latest technological developments at the intersection of transformative trends that are creating new and diverse opportunities for the industrial ecosystem, adopting the framework of GPTs. According to the economic literature, GPTs are characterized by their pervasiveness across most sectors of the economy, fast evolution and by the ability to enable further products’ or process’ innovation. In general terms, these technologies are developed in ways that can be employed by different potential downstream licensees and can accommodate different strategies.

The GPT “lens” provides a useful way of organizing thinking around technological innovation. From the GPT perspective, innovation embodies two meanings and corresponding domains for inquiry worth exploring. The first one is the generation of knowledge and technologies that are progressively incorporated into the standard. Standardization activities draw on the continued effort of a range of different global actors, including specialized technology suppliers, vertically integrated providers, and, to a more limited extent, public research organizations. This effort has already led, with the 5G, to the development of connectivity solutions with features, in terms of speed, capacity, and latency that represent a sharp change with respect to the previous generation; connectivity is expected to reach even higher performances with 6G.

The second domain for inquiry connected to GPT framework refers to downstream innovation enabled by the combination of advances in efficient computing, wireless connectivity and Artificial Intelligence. The latest digital technologies may open up many opportunities for innovation and disruption of existing value chains in different “verticals”, with industries as diverse as manufacturing, transport, retail, and gaming likely to be impacted by the transformation of existing processes and the introduction of entirely new products. More into the future, concepts like the Metaverse, in its various economic and societal possible threads, may open new unchartered possibilities for innovative uses, especially in communication technologies.

GEOPOLITICS OF TECHNOLOGY

The fourth newer area of research refers to the Geopolitics of Technology. While technologies have always been a driver and object of international cooperation, in the current phase, the tremendous acceleration of technological progress has induced an escalation of the strategic competition between the US and China. In this context, Europe has so far taken a lead in promoting a responsible transition to the digital age acting as a standard-setter in a number of crucial areas – such as data protection (with the General Data Protection Regulation) and digital platforms regulation (with the Digital Markets Act).

At the same time, Europe’s research and innovation performance has been falling behind, with Europe lacking the technological leaders that emerged and consolidated in other regions of the world. With the European Chips Act and other digital initiatives, Europe is sending the signal that it aims at a stronger position, also in terms of economic performance, in the geopolitical scenario, a goal that is referred to in terms of technological sovereignty. 5G deployment has offered the stage in Europe for the first “battleground” of this new phase of geopolitical tech competition. The debate in Europe about the exclusion of Chinese vendors in the 5G rollout has demonstrated the vulnerability of Europe, caught in between the dependence on China’s relevant position in the value chain for information and communication technology, and the long-standing diplomatic alliance with the United States. In this debate, issues of security are frequently raised, in two slightly different ways – in terms of national security or network security – but clearly politically and strategically motivated considerations are also at play.

Under this research line, topics to be addressed include the nexus between Intellectual Property frameworks and the geopolitical approach to emerging technology development and application and the implications of transatlantic cooperation for innovation and competitive dynamics on the global scale in the next years.

Events

Florence Seminar on Standard Essential Patents

Florence Seminar on Standard Essential Patents

6-7 October 2022

Badia Fiesolana – Teatro and online

The seminar fosters a scientific debate on approximately 15 selected papers which will focus on the licensing and litigation of Standard Essential Patents (SEPs), with particular emphasis on the societal impact of the research findings.

More information

Florence Patent Licensing Academy

Florence Patent Licensing Academy: Law, Economics and Practice of Patent Licensing

3-6 October 2022

4-day advanced training, residential or online

Patents are considered as a key to innovation and growth. In the pharmaceutical industry, they protect costly and long-term research of new and improved drugs; global ICT standards, such as 4G, 5G, Wi-Fi and HEVC enable interoperability, connectivity and innovation across different economic sectors and are building blocks of the digital economy and the Internet of Things (IoT). Each sector, however, has its specific use of patents and different licensing traditions.

The Patent Licensing Academy offers advanced training on the law, economics and practice of patent licensing, providing participants with a comprehensive understanding of:

  • The law and economics of patents and patent licensing;
  • Patent licensing peculiarities and practices in telecommunications, pharmaceutical, automotive and IoT industries;
  • Practical aspects and challenges related to negotiations and litigation of standard-essential patents (SEP);
  • Up-to-date case law and developments regarding licensing of SEPs in the IoT.

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Innovation in 5g Technology: Leadership, Competition, and Policy Issues

Innovation in 5g Technology: Leadership, Competition, and Policy Issues

27 April 2022

Online

Join the presentation of the Telecommunications Policy’s new special issue ‘Innovation in 5G technology: leadership, competition and policy issues’ (2022). Contributions to the special issue provide insights on the opportunities and challenges raised by the implementation of 5G across sectors and explore potential implications for policy.

Standard Essential Patents: the Evolving Licensing Framework

Standard Essential Patents: the Evolving Licensing Framework

21 April 2022 @ 3:00 pm – 5:30 pm CEST

Badia Fiesolana, Teatro

The seminar will start with the presentation and discussion of a book by Igor Nikolic, Licensing Standard Essential Patents: FRAND and the Internet of Things (Hart Publishing 2021) and will continue with a roundtable discussion on the recent global developments regarding the SEP licensing framework.

The roundtable will gather academics, policymakers and industry representatives to discuss recent policy developments in SEP licensing, such as the US DOJ Draft Policy Statement, the UK SEP Consultation, the EU SEP Consultation, patent pools, and LNGs.

Read more & Register

Transatlantic Relationships in Innovation Policies: Converging Agendas?

Transatlantic Relationships in Innovation Policies: Converging Agendas?

10-11 November 2021

Badia Fiesolana, Refettorio

During the conference Transatlantic Relationships in Innovation Policies: Converging Agendas? we gathered experts, industry leaders, and policy actors from both sides of the Atlantic to address the policy initiatives and industrial developments in the regions, and the scope for cooperation among them in the field of IP and standard-setting.

View the programme here.

Conference recordings

First Keynote by Matthias Jørgensen (EU Commission) + Roundtable on 5G 

Second Keynote by Alex Rogers (Qualcomm)

Third Keynote by Daniel Spulber (Northwestern University) + Roundtable on Pricing Innovation

Final Keynote by Pierre Régibeau (European Commission)

5G in the Time of Pandemic Webinar Series

5G in the Time of Pandemic Webinar Series

29 October – 3 December 2020

Online Event

This series of five webinars provided an opportunity to discuss the impact of COVID-19 on the future of the 5G, exploring the topic from different perspectives: infrastructural, economic, geopolitical and technological.

Details and video recordings of the webinars are also available here.

Conversation on Patents, Innovation and Competition

Conversation on Patents, Innovation and Competition

24 September 2020

Online Event

This online seminar aims to present and discuss four recent works dealing with several debated issues on standardisation and standard essential patents.

Find out more about the conference here.

Innovation Conference: The way towards the Internet of Things: Open Standards vs Silos

Innovation Conference: The way towards the Internet of Things: Open Standards vs Silos

15 November 2019

Badia Fiesolana, Refettorio

Find out more about the conference here.

Competition Law and Standard Essential Patents

Competition Law and Standard Essential Patents; Testing the Limits of Extra-territorial Enforcement

18 October 2018

Badia Fiesolana, Refettorio

During the conference Competition Law and Standard Essential Patents we gathered academics, practitioners, officials from National Competition Authorities (NCAs) and representatives of the industry in order to discuss the challenges linked to the extra-territorial enforcement of competition law vis a vis abuses of Standard Essential Patents (SEPs).

View the programme here.

Innovation and Market Power in the Food Supply Chain

Innovation and Market Power in the Food Supply Chain: Challenges for Competition Policy and Regulation

20 September 2019

European University Institute, Florence

Find out more about the workshop here.

Advanced Competition Seminar FCP “Assessing Innovation Theories of Harm in EU Merger Control"

Advanced Competition Seminar FCP “Assessing Innovation Theories of Harm in EU Merger Control” 

13 April 2019

Badia Fiesolana, Refettorio

Find out more about the Advanced Competition Seminars here.

PUBLICATIONS

Publications related to the project

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