Transcript The WIPR 2015 * Breakthrough Innovation and Economic Growth

The WIPR 2015 – Breakthrough
Innovation and Economic Growth
Thomas Hoeren
Paris July 2016
WIPO Reort 2015
• Breakthrough innovations
• Historical innovations
– Airplanes
– Antibiotics
– Semiconductors
• Current innovations
– 3D printing
– Nanotechnology
– Robotics
Elements of success
• Governmental funding of scientific research
• Competitive market forces
• Linkages between innovation actors
– Informal knowledge exchanges
– Formal university – industry licensing
Patenting activities
• Geographically concentrated
• 80% in all six cases by high-income countries
• Mostly US, Japan, Germany, France, UK and
Korea
• Increasing influence of China
• Increasing influence of universities and public
research organizations
• Academic patents differs across countries
Evolving role of IP
• IP incentivizes innovation and enables
technology markets
• Copyright and trade secrets becoming
increasingly relevant
• perspectives: growth will resume – but
doubts:
– Demographic shifts: secular stagnation
– Estimates of economies´ productivity growth
Semiconductors - Structure of study
• Part 1: Semiconductors as technical innovation
and its economic contribution
• Part 2: Semiconductors – the underlying
ecosystem
• Part 3: Semiconductors and the IP system
• Part 4: And the future?
The US starts?
• 1954: The IC period starts
– Military asked for photolithographic (also named
photoengraving) techniques developed for
creating patterns on printed circuit boards
– September 1955 William Shockley and Arnold
Beckman founded Shockley Semiconductor
Laboratory as a Division of Beckman Instruments
in Mountain View (start of Silicon Valley)
The US starts?
• 1954: The IC period starts
– In July 1959, Robert Noyce from Fairchild filed for
the US patent for "Semiconductor Device and
Lead Structure“ (first IC)
The US starts?
• 1954: The IC period starts
– The invention of Noyce was recorded only a few
months after the key findings of Jack Kilby, an
employee of Texas Instruments. Kilby invented the
concept of the monolithic integrated circuit by linking
diodes, transistors, resistors and capacitors with
aluminum metal lines on top of the protective oxide
coating
– The inventions of Noyce and Kilby were yet made
independently of each other so that Fairchild and
Texas Instruments had separate patent rights in their
co-invention.
And the rest of the world?
– In 1934 the German expert Oskar Heil constructed a
working field transistor (Feldeffekttransistor) and got
a patent for its construction
– In 1952 the British physicist G.W. A. Dummer
proposed to integrate the transistor in a solid block
without any connecting wires. The electronic
functions should be connected directly by “cutting out
areas of the various layers
– world´s first model of an IC was demonstrated at the
1957 International Symposium on Components in
Malvern, Wales.
And the rest of the world?
– In August 1948 German physicists Herbert F. Mataré
(1912–2011) and Heinrich Welker (1912–1981), employees
of Compagnie des Freins et Signaux Westinghouse in
Aulnay-sous-Bois (France), started an application
procedure for a patent on a “transistron”– amplifier based on the minority carrier injection process.
– developed independently of the transistor created in the
Bell Labs whose features were published in June 1948. The
first solid-state radio receiver with four transistrons was
presented at the Düsseldorf Radio Fair in 1953. Parallely, in
1952, Welker (Siemens) identified gallium arsenide as a
possible semiconductor
And the rest of the world? Japan
• Early years: Japan as chip producer
– Hitachi, Matsuhita Electric, Toshiba, Nippon
Electric, Mitshubishi Electric, Kobe Kogyo (today
part of Fujitsu)
– Small Japanese companies such Tokyo Tsushin
Kogyo, later renamed Sony, used ICs within small
size radios. The first device was the Sony TR55
portable which included two semiconductor
diodes. NEC discovered a big potential market for
desktop calculators.
And the rest of the world ? Japan
• Japan as chip inventor
– The nobel prize winner Leo Esaki of Sony
discovered negative resistance characteristics in
the current-voltage characteristics of very highly
doped PN junction in 1957 and
– He reported this result at the fall conference of
the Physical Society of Japan in the same year and
also at the international conference in Brussels in
1958.
And the rest of the world ? Japan
• Japan as chip inventor
– The Esaki report was very much appreciated and used
by Shockley, the inventor of the transistor in the US.
– There was however no clear patent strategy in Japan
at this time and no clear R&D strategy developed by
the Japanese government (which had to do with the
fact that Japan had no military or space forces
interested in these technologies as in the US).
– Therefore, Esaki never asked for a patent for his
invention but shared his ideas with other international
researchers. In 1960 a Bell employee filed a patent
application for the Esaki effect.
The ecosystem in the US
• starting point: military forces and space
agencies, especially the Navy, the Army, NASA
and the AEC/DOE (Atomic Energy Commission
and the Department of Energy)
• combined with the aggressive funding and
development policy of Californian universities,
such as Stanford University, the University of
California (Berkeley) and Caltech
The ecosystem in the US
• driving force at the early times was only one
company, AT &T with Bell Laboratories as its
research unit and Western Electric as its
manufacturing arm
• AT&T was forced by the antitrust Decree of
1956 to refrain from selling semiconductors
commercially.
And Japan?
• Military procurement had no impact in Japan
• The country was relatively poor and had a lot
of cheap labor forces
• US and Japan forced preferential treatment
for their national firms
• concept of life-time employment
• national banking industry
• MITI
The IP System
• Semiconductors have historically been held to
have been incapable of a traditional IP
protection.
• Patent protection was considered to last too long
regarding the integrated circuit's useful
commercial life of less than one year. In addition.
Patent protection was considered useless as most
layouts of IC were held to be obvious variations
of prior layouts. It was criticized that the circuit
layout could not be described in the form of a
valid patent, i.e. verbally.
Phase 1: Libertarian cross-licensing
• Until 1939 semiconductor research was done
by independent university centers based on
an interdisciplinary co-operation between
theoretical and experimental physicists,
mathematical physicists and chemists and
semiconductor technology.
Phase 1: Libertarian cross-licensing
• In the US, the situation changed however in
the Second World War when US military
forces stressed the use of patent protection
for these new technologies. While the
Europeans were talking at conferences, the US
experts were applying for patents
Phase 1: Libertarian cross-licensing
• Bell had an interesting concept of sharing the new
transistor technology with experts around the world in
order to support innovation.
• Therefore, Bell organized three conferences for other
scientists to get acquainted with the new semiconductor
technology first hand. People interested in a conference
had to pay a $25,000 patent-licensing fee upfront
deductible against future royalties. and were allowed to
visit the nine-day Transistor Technology Symposium,
including a tout through Western Electric's transistor
factory in Allentown, PA. The proceedings of these
symposia (The Transistor) was called "Ma Bell's Cookbook"
and became the leading guidebook for the semiconductor
industry in the 1950s.
Phase 1: Libertarian cross-licensing
• consent decree in January 1956:
– AT & T agreed in this decree to grant royalty-free licenses
on any patent issued before the time of the decree to any
applicant.
– All future Bell patents were to be made available at
reasonably royalties on any of its patents sought by the
Bell system.
– AT & T and its subsidiaries were barred from “engaging in
any business other than the furnishing of common carrier
communications services”.
– Western Electronic was prohibited from selling
semiconductors in the commercial market (with the
exception of governmental contracts).
Phase 1: Libertarian cross-licensing
• Existing patents were thus either cross-licensed or simply
ignored. The problem with patents was that nobody really
knew who was the inventor of which part of the ICs.
• The name of Shockley was for instance left off the patent
application after lawyers of Bell found that Shockley´s
writings on transistors were “highly influenced” by an
earlier 1925 patent granted to Lilienfeld.
• Furthermore, the big players Fairchild and Texas
Instruments sued against each other for patent
infringements; in a 1966 settlement each party dropped its
opposition and agreed not to dispute its rivals patents for a
period of ten years.
Phase 1: Libertarian cross-licensing
• One of the big symbols of this spirit was the
instrument of reverse engineering which
allowed all semiconductor companies to check
the interiors of circuits produced by
competitors.
Phase 2: The Japanese – US Chip-war
• Very restrictive trade barriers erected in the US against
European and Asian semiconductor products.
• The US government used a “Buy American” policy
which required foreign corporations to bid 6% under
the lowest bid by an American form. In military
procurement cases, foreign bids were increased for
50% since 1962.
• The Japanese Government answered quickly to this
preferential treatment for US companies.
• In 1960 US and Japanese companies started a patent
war over semiconductors which lasted for a decade
Phase 2: The Japanese – US Chip-war
• The Semiconductor sui generis protection right
was an invention of Intel and its counsel Roger
Borovoy.
• After a first attempt of the US Senate to extend
copyright protection to integrated circuits failed,
the lobbyists representing the interests of the
Californian semiconductor industry fought
together with the US House of Representatives
for a separate protection regime.
Phase 3: The SCPA
• the Semiconductor Chip Protection Act 1984
(SCPA)
• new kind of industrial property containing
elements of patent, copyright and
competition law
• “mask-work”. “mask” is the pattern used to
set the circuits on the silicon-wafer in order to
create the integrated circuit.
Part 4: And the future?
• Since the mid-1990s, the topic seems to have
disappeared totally.
• hardly any publication on the protection of
semiconductor technology, except for reviews
in standard works, e. g. textbooks.
• Furthermore, only a few decisions are known
dealing with the sui generis regime (i.e. the
Brooktree case)
Part 4: And the future?
• Today the sui-generis rules for semiconductors
are really “dead”. Industry is relying on
patents.
• Paradox: companies rely more and more on
patents, patents are yet considered to be the
most ineffective tools for protecting the
knowledge especially in that sector
• Going back to old times of the 1950s and the
model of cross-licensing patent rights
Further questions
• [email protected]
• http://www.wipo.int/edocs/pubdocs/en/wipo
_pub_944_2015.pdf
• Prof. Dr. Thomas Hoeren/University of
Münster (Germany)