‘IP for Sale’ Drives Innovation

Could an open market for intellectual property (IP) can help to increase levels of innovation among researchers?

An open market for intellectual property (IP) can help to increase levels of innovation among researchers, it has been claimed.

In new findings from the California Institute of Technology, analysts claim that the ability to trade in IP functions more effectively than a "winner takes all" pattern of ownership as occurs under non-tradable patent rights.

Professor of economics and management and professor of finance at Caltech Peter Bossaerts led the international team which worked on this latest project.

His areas of interest cover some of the major economic posits such as game theory and equilibrium theory.

In the recent study, two versions of a game were devised - one where only one winner was rewarded for being the first to find the full correct answer and a second where all participants received a partial reward depending on their performance.

While the first option may seem conducive to greater levels of competition, the outcomes which supervened in practice were quite the opposite.

In the study, it was found that those who did not win the game in the first few instances adopted the opinion that there was no point in trying any longer.

According to Professor Bossaerts, this is comparable with the patent system whereby only the first person to solve a problem receives commercial rights to market their solution.

But by allowing individuals to trade part-solutions and share the rewards helps to result in an overall solution being devised, he explains.

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