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the innovative LEDGER Vol. 2, No.
2, Summer 2002 On May 28, the U.S. Supreme Court ruled in a case that is unlikely to make the headlines or create a major stir, but has considerable significance to those interested in how we encourage - or discourage - innovation in America. The case in question is Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., and involves Festo's invention of a "rodless cylinder," a device which allows objects inside a cylinder to move using magnets rather than a piston. It has many potential applications, better explained by engineers and physicists than by this writer. The court ruled that when a company obtains a patent on a new product or process, the patent protects it not only against those who would replicate the product, but also against those who would come out with a slightly altered version of the product that essentially performs the same function in the same way. In
other words, the court said, "No tweaking!" Intellectual property (IP), esoteric as it may sound, is critically important to the companies that develop it. Not only does it create a wellspring of ideas that can result in successful new products and services, but it also constitutes an important capital asset, much like cash, equipment or real estate. When a company invests in the invention process; i.e., in creating intellectual property, it is practicing capitalism at its best: generating product and service concepts that can benefit mankind while enriching those whose hard work and investments make it all possible. Tweaking
gets in the way of all that. When competitors are allowed to commercialize
products that are "new" by dint of minor design changes
or other inconsequential variations, it becomes a powerful disincentive
to the real innovators. One may argue that by allowing more firms to cash in on a new product or service, this will drive down costs and make it accessible to more people. In fact, that's exactly what does happen when a patent expires. However, when competitors are allowed to immediately jump into a new market with products they have in essence copied (in fact, they are referred to as "copyists" in IP legalese), the impetus for innovation dries up. Why bother to hire the best and brightest, then spend the time and money required to develop and bring a new product to market (not to mention the effort and expense of filing for a patent), if your competitor can come out with essentially the same thing by making slight alterations that add nothing to its functionality or effectiveness? Yes, it may increase accessibility in the short term, but in the long run we all suffer - even the copyists themselves - when the incentive to invent something new has been removed. Innovation
is, and always has been, the fuel that keeps our country's economic
engine running, whether at high speed in the boom periods or at low
idle during the downturns. I believe the Supreme Court made the right
decision in extending patent protection to include competitors' products
that break no new ground, because it helps keep the spirit of innovation
alive.
As for the copyists? Let 'em invent their own stuff. *
* * * * * * * * * * * * * * * * * * * It's summertime! Pack up the car and hit the road! Here are 5 tips for adding a little creative spark - and some fun - to your trip! 1.
Leave the business books home - give your mind a break from knowledge
management, strategy vs. tactics, 360 evaluations and all the rest.
Much more fun to read a good novel and… you'll be surprised how
many business insights you can get from a well-told story! * * * * * * * * * * * * * * * * * * * * Names We Like We're always on the lookout for creative business or product names. If you know of any good ones, send them along! You may see them in an upcoming issue!
* * * * * * * * * * * * * * * * * * * * Innovation Quotation "I
was told over and over again that I would never be successful, that
I was not going to be competitive and the technique was simply not going
to work. All I could do was shrug and say 'We'll just have to see'."
- Dick Fosbury, inventor of the "Fosbury Flop" high jump
technique, which brought him the gold medal at the 1968 Olympics in
Mexico City. It is now the standard method used by high jumpers the
world over. * * * * * * * * * * * * * * * * * * * * The Innovative Edge™ Inc. is a consulting firm based in Massachusetts that helps client organizations tackle tough challenges through creative problem solving. Its president, Jeffrey A. Govendo, works in a broad range of industries as a project consultant, group facilitator, trainer and conference designer, enabling organizations to achieve their goals by increasing their capacity for innovation. Contact
The Innovative Edge at: Copyright © 2002 The Innovative Edge, Inc. The
Innovative Edge, Inc. |
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