Danish Industry - a trade organization - published a new report comparing patent applications among the OECD countries. When it comes to biotech and environmental tech, the Danish per capita patent application numbers are second to none.
But when they look at IT patents, the picture is not as uplifting.
What is it about Danish IT that differs so dramatically from biotech and environmental technology?
Danish biotech has some very big and old players, Novo and Lundbeck just to mention two. I am sure their processes for getting patents are well established and known by their managers in R&D. Actually, I am pretty sure that every single employee in these companies know that their company holds some pretty unique patents - even if they don't know exactly what they are.
But there is no "Novo" in Danish IT. As soon as some companies have shown good potential, Google or Microsoft or Ebay or other big players have swept in and picked up the company. And then it stops being "Danish".
Or the founders have moved the company to Silicon Valley because you can't get serious funding in Denmark. But then it stops being "Danish".
The Swedes seem to have figured out how to keep IT companies funded. Most weeks The Nordic Web lists new funding rounds and where Danish companies are lucky to raise a million DKK, Swedish companies regularly raise millions in €. Consequently, many more patent applications come out of Swedish IT.
Truly Danish IT patents have to come out of smaller players - who may not have a smooth, well known, and trusted process for handling patent applications.
Do you know to how to apply for a patent?
It is not the first thing they teach you at business school and I am sure it is not the first thing they teach engineers.
Which of these obstacles apply to your organization?
- Lack of understanding of how to protect one's intellectual property.
- Lack of knowledge about how to apply successfully for a patent.
- Lack of interest in making ones "secret sauce" public.
- Lack of funds to apply.
- Lack of awareness in the broader organization that this is cool.
1) To be patentable, an idea has to be new and not obvious. New - as in that nobody has already filed for a patent or implemented a similar technology in their products. New - as in this is not already existing in open source code. Not obvious - as in that everybody have known this for eons before anybody thought to protect ideas with patents. You can't patent that the accelerator is for your right foot - it is already industry standard.
How do you describe your ideas in a way that meets these criteria?
2) Even if your idea is good enough, do you know what it takes to go through the patent process? Do you have the advisors who can check if patents in your field already exist (and help you tweak your idea so it is not a copy)?
3) Perhaps you don't want to patent because once you do, your method is out there. Coca Cola's secret ingredient is not patented because they don't want to let you know what it is. In trails involving algorithms, companies don't want to disclose the content of their algorithms because they are trade secrets.
The article from Danish Industry mentions that the European and the U.S. patent systems differ significantly. Might it be that if one is not ready to enter the U.S. (or Chinese) market and/or defend ones Intellectual Property abroad, one might not apply for a patent at all, because having a Danish patent doesn't necessarily give protection in the U.S.(China)? If the IP is described in a Danish patent, there is no hindrance for other players to copy it if you can't afford to drag them to court. It doesn't matter if you are right if you are already bankrupt from legal fees.
(That said, in 2015 Danish companies applied for 2,290 patents in the U:S.)
Even if you don't want to take out a patent, knowing that you are not violating somebody else's patent is better done before too much effort and money is thrown into the project.
4) Lack of funds for applying for a patent could apply to most new startups - they may even be run as a side activity with founder(s) having a day job to pay for living expenses. "Applying for patent" is a normal activity seen in Kickstarter projects for when the company has secured some crowd funding. If it needs to be an international patent from day one (ref the implications above) it does require more funds than most people can set aside from their normal paycheck.
A Danish patent can be had for DKK 3,000 (or approximately USD 500) while an international patent is at least five times as expensive. That does not include lawyers or other assistance, just the fees.
5) Who come up with ideas? In most organizations all patents come directly out of R&D. But all employees may be sitting with ideas that could be worth examining. If the organization creates enough awareness about its quest for good ideas and has a transparent process rewarding such ideas, you never know who may pitch in. And trust me, once ideas come from staff outside of R&D, the competition is on: People in Sales or Service who pick up customer needs, People who use the company's products (ouch, "taking you own medicine") Heck, I even know of a CFO with an IT patent.
Or we can just make peace with the idea that a 5.5 million population can't have expertise in all industries...