Innovation and “The Adjacent Possible”: Open Innovation Models vs. Intellectual Property September 30th, 2010Patents/IP INNOVATION AND “THE ADJACENT POSSIBLE”: OPEN INNOVATION MODELS VS. INTELLECTUAL PROPERTY Book alert and essay by John R. Harris September 29, 2010 Practice tip: Prospective investors in technology ventures must carefully consider the intellectual property ramifications of companies with products developed in open, collaborative models vs. proprietary models that require strong intellectual property protections. * * * * * Steven Berlin Johnson’s forthcoming new book, Where Good Ideas Come From: The Natural History of Innovation, discusses the idea of the “adjacent possible.” Based on excerpts from the book, I think this means that many inventions and innovations (not the same thing) seem to occur incrementally and at the margins. Creative and clever people can readily take what is available nearby – knowledge, tools, other people’s works, etc. – and combine these to make something that is meets a need. In the book, he gives the example of the Apollo 13 mission, where the mission control engineers were given a jumbled pile of gear on a conference table – hoses, canisters, stowage bags, duct tape and other assorted gadgets – and told they must create a life-saving carbon dioxide scrubber using nothing but the parts on the table (which the astronauts had in the spacecraft). Mr. Johnson is clearly a gifted writer and thinker. He has several other interesting books including Everything Bad is Good for You: How Today’s Popular Culture Is Actually Making Us Smarter (2005) and The Invention of Air. From the excerpts, the new book seems to be making the case for less intellectual property and more open source / open development / collaborative innovation models. Such criticisms are justified to some degree because of imperfections in the intellectual property legal regimes. But not all innovations come from the adjacent possible. Some come from “somewhat farther away,” requiring investments in time and resources to create, as well as mechanisms to recover those investments. Here is an excerpt from his new book that was published in the Wall Street Journal on September 25, 2010: The premise that innovation prospers when ideas can serendipitously connect and recombine with other ideas may seem logical enough, but the strange fact is that a great deal of the past two centuries of legal and folk wisdom about innovation has pursued the exact opposite argument, building walls between ideas. Ironically, those walls have been erected with the explicit aim of encouraging innovation. They go by many names: intellectual property, trade secrets, proprietary technology, top-secret R&D labs. But they share a founding assumption: that in the long run, innovation will increase if you put restrictions on the spread of new ideas, because those restrictions will allow the creators to collect large financial rewards from their inventions. And those rewards will then attract other innovators to follow in their path. The problem with these closed environments is that they make it more difficult to explore the adjacent possible, because they reduce the overall network of minds that can potentially engage with a problem, and they reduce the unplanned collisions between ideas originating in different fields. This is why a growing number of large organizations—businesses, nonprofits, schools, government agencies—have begun experimenting with more open models of idea exchange. Organizations like IBM and Procter & Gamble, who have a long history of profiting from patented, closed-door innovations, have embraced open innovation platforms over the past decade, sharing their leading-edge research with universities, partners, suppliers and customers. Modeled on the success of services like Twitter and Flickr, new Web startups now routinely make their software accessible to programmers who are not on their payroll, allowing these outsiders to expand on and remix the core product in surprising new ways. (emphasis supplied.) Here is a link to that article: http://online.wsj.com/article/SB10001424052748703989304575503730101860838.html The idea of the “adjacent possible” is not radically new. Mr. Johnson credits the term to the bioscientist Stuart Kauffman. The open source software movement has embraced the concept, although perhaps not by the term “adjacent possible,” since its inception. The premise of open source software is that fundamental software algorithms are well known to many in the field, and that certain types of software are best improved in an open, collaborative manner where all can explore how the software works and find ways to improve it. Mr. Johnson raises a valid criticism of the intellectual property legal systems such as patents – patents make it more difficult to explore the adjacent possible. However, the patent system, although far from perfect and constantly in need of improvement, already has built-in legal mechanisms to prevent patents from being awarded to inventions that are merely the adjacent possible. This is the notion of obviousness, which was codified in its present form in the U.S. patent laws in 1952 (35 U.S.C. § 103), but existed in the case law well before that. Patents are only supposed to be granted for non-obvious inventions. There is also the notion in the U.S. patent laws that patents are only granted for limited times. Patents are not supposed to be a permanent impediment to incremental improvement – they only last 20 years. Twenty years sounds like a long time, and it is for many types of products, but it is often not enough for foundational technologies and products, especially those that are sufficiently categorical to help establish new industries and markets. A real problem is that patents last too long for some products, and that the patent systems (both in the U.S. and elsewhere in the world) strain at the margins of the “adjacent possible.” Patent offices and courts struggle mightily to determine what is obvious and incremental, or nonobvious and deserving of greater protection. As an IP attorney, I will admit to a certain bias towards the patent system. I have personally helped with a number of remarkable successes both financially and personally for many deserving inventors and emerging companies. Many of these have been helped along by good patent protection. I have seen the fruits of innovation and significantly multiplied returns to investors who have taken risks with new ventures and insisted upon filing good patents. I have also witnessed the frustrations of clients faced with questionable, seemingly “obvious” patents that threaten their business and livelihood. And I have labored in trying to explain the inconsistencies of a patent system that often denies deserved patents yet inexplicably grants undeserved patents. But these frustrations and inconsistencies are matters for legislation, better government, better management of the patent office, wiser application of the present laws, and improvement of the patent laws when necessary (for example, through carefully considered and meaningful patent reform). I hope that Mr. Johnson’s book will reinvigorate thinking about the patent system and its benefits, and will thoughtfully address the shortcomings. I look forward to reading the book and thinking about his propositions about innovation. I hope that he will get a wide audience and stimulate the debate at the highest levels of industry and government to carefully consider and urge meaningful patent reform – and soon. And I am an enthusiastic proponent of the adjacent possible. But I am also a proponent of a system that provides creative people with a sufficient financial and personal motive to bring their inventions to the broader public, and attract the investments required to achieve that. Although the “adjacent possible” may be accessible without relatively little investment, the “somewhat farther away” usually requires significant investments. The patent system is the best currently known vehicle for returning those investments. An improved patent system would be even better. For now, the dilemma for prospective investors in technology ventures remains: Should we invest in a target company that has a product developed in an open, collaborative, incremental, “adjacent possible” model, and if so, do can it build the personnel, service model, and marketing infrastructure to withstand the inevitable competition that comes from such open models? Should we invest in a more innovative “somewhat farther away” product that needs or can otherwise benefit from the classical intellectual property protection such as patents? What are your thoughts, ideas, and comments on the idea of the “adjacent possible”? You can submit your comments on the MMM Tech Law group page. The thoughts and opinions here are those of the author, and not of the law firm of Morris, Manning & Martin, LLP or any of its clients. * * * * * This information is presented for educational purposes and is not intended to constitute legal advice; see disclaimer at http://www.www.mmmtechlaw.com/privacy-policy-and-disclaimer/. Contact John Harris for more information at firstname.lastname@example.org; 404-504-7720.