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Open Innovation & IP: Introduction

This is the first post in a series on Open Innovation. For more information, please click the "Open Innovation" Tag. I recommend reading the posts in chronological order.

Though it's been over 10 years since its publication, Henry Chesbrough's Open Innovation: The New Imperative for Creating and Profiting from Technology remains fresh and insightful.

The term "open innovation" was a term promoted by Henry Chesbrough to argue that a transition is needed in certain industries whereby firms can and should consider both external as well as internal ideas, and external as well as internal paths to markets. This is in response to traditional "closed innovation" models where only internal ideas are developed and presented to the market via internal paths.

Thus, the traditional "closed innovation" model may be best represented with the following graphic from Chesbrough:

Alternatively, the "open innovation" model may be represented with the following graphic:

These two graphics present a stark contrast. In closed innovation, firm boundaries are set so that only internal research ideas are ever considered for development. Any ideas that are not developed--for example, because they do not relate to the firm's core business--atrophy and die. Conversely, an open innovation model is agreeable to considering research projects that come from outside the firm. Additionally, internal research projects that are not internally developed may still be developed outside the firm via new markets that were not originally intended, capturing value from projects that would have otherwise died. Over the next few posts, I will be exploring the open innovation model from an IP perspective with a particular emphasis on how it affects certain industries, such as the medical device industry. I will also attempt to provide some anecdotes from my experience in the medical device industry to better illustrate how this transition has been underway for some time and continues to progress.