The dilemma between whether to seek patent protection or run with the Open Source innovation trend is crucial for entrepreneurs working to create and monetise business innovations in developing countries.
At the present time innovative inventions coming out of African countries are not very conspicuous. In fact less than 1% of all patents filed worldwide originate in Africa. At the Convergences World Forum which took place in Paris on 8-10 September, the issue of intellectual property relating to business innovation was debated at a session entitled ‘Protection versus Open Innovation: How to combine innovation and access to new technologies for all?’ Is the reason why not many patents are taken out by researchers and companies in Africa basically that they are seen as a hindrance to economic development? At the session, Luc Savage, Director, Intellectual Property and Licencing, R&D, at Orange Labs, pointed out that “the basic question is whether you really need to set up patent systems and create a lot of regulation in developing countries, where there isn’t much in the way of intellectual property infrastructure, in order to develop the economy.” And this is especially true for the African continent, he underlined.
Social development projects also need to be profitable
Different types of innovation project may in fact require different approaches to intellectual property protection, but this would mean looking at each on a case by case basis. Discussing the role played by patents in encouraging innovation, Luc Savage argued that “it really depends on the business model. If you need to make a name for yourself before you can successfully roll out a service, the Open Source model fits perfectly. If however you need to make substantial long-term investments in technology upstream, filing a patent, which will give you 20 years’ protection, is certainly more appropriate.” It can also be reasonably asked whether intellectual property protection will foster widespread access or whether it is likely to restrict the field of innovation. However, if innovative solutions are to be made available to the general public, this can only be done where there is a mechanism for making a profit that will sustain development in the long term, i.e. every player all along the chain needs to have a financial stake in the project.
Licencing can provide a win-win solution
The watchword of the session was the need to find a ‘win-win’ solution for developing and monetising innovation. Boosting entrepreneurship in developing countries in a way that will lead to the breakthrough of disruptive innovations is all about ‘inclusive’ growth – i.e. finding a development model from which everyone can benefit, speakers underlined. To illustrate just how protection of intellectual property can bring the very best out of a business sector, Luc Savage took the example of Ethiopian coffee distributed by a large US chain. The producers have created their own brand by insisting, as a condition for continuing to supply the US chain, that the local name ‘Yirgacheffe’ be used in the outlets where their coffee is sold. The trade mark is now officially registered and so the distributors have to pay the Ethiopian producers a licence fee in addition to paying for the actual coffee. The brand value has served to boost the reputation of Ethiopian coffee among Western consumers, generating over $200 million in profit per annum, which has enabled the Ethiopians to make improvements in the entire coffee production chain in their country.