We know that there are basically two ways to adopt open innovation in a company: - The inbound process, which exploits external sources of innovation in order to integrate external know how and innovation into the company.
- The outbound process, which utilizes external innovation opportunities with internal capabilities and resources.
Because leveraging external resources is extremely popular at the moment, the outbound process often is forgotten. But remember how many patents and license are not used in many companies (according to Chesbrough). The example of GlaxoSmithKline shows how to leverage unused intellectual property.
The Case of GlaxoSmithKline
The international drug company GlaxoSmithKline (GSK) changed their strategy towards a strong focus on the developing world. Basically, they are doing four things:
- cut their prices for all drugs in the 50 least developed countries by 75% (compared to UK/US level).
- Reinvest 20% of their profits into developing country infrastructure
- Invite scientists to join their hunt for tropical disease treatment
- And most important from an open innovation point: They will put certain intellectual property rights which are relevant for finding drugs for neglected diseases into a patent pool.
This enables researchers to use IP which was previously not used by the company. As Jordan Hatcher writes in his blog, neglected diseases are neglected because of simple commercial and financial reasons.
Hence, as GSK doesn't want to use these IP it can at least generate some value through publishing it in a patent pool. In this case, they generate value through a more positive PR and a higher company reputation in the developing world, in the scientific community and especially for their customers.
Finally, everbody is profiting from this step towards open innovation: the developing countries, the company and the general public.
From the Guardian and tangible-ip.com
Comments
This is especially true when looking to prevent government regulation by showing that market regulation is taking care of the problem. For example, this shows that government doesn't need to create new law (or use existing law) to force patent pooling in cases such as neglected diseases.