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Microsoft adopts a new IP strategy with its “Shared Innovation Initiative”

By David Schwartz
Published: April 17th, 2018

In a blog post from its president Brad Smith, Microsoft announced a new set of seven “Shared Innovation Principles” that could impact the way their corporate research agreements are structured – and perhaps influence other companies to follow suit.

The new Shared Innovation Initiative “is based on a set of principles designed to address co-created technology and intellectual property (IP) issues that give customers clarity and confidence regarding their work with Microsoft,” Smith said.

He cited an example that typifies the IP issues arising in tech partnerships. At a South Korean hospital, innovators are “improving the precision and safety of surgeries through a motion-tracking artificial intelligence (AI) application that it co-created with Microsoft. The hospital used sensors to collect data on more than 2 billion movements of surgeons’ hands during operations and used machine learning to identify patterns that can serve as a ‘GPS for surgeons,’” Smith explained. “In addition to applying this technology to its own business, the hospital plans to now sell software and a training program to other hospitals, creating a new line of business and revenue stream.”

He continued: “As collaboration like this between tech companies and their customers increases, so will the questions regarding who owns the patents and resulting intellectual property. There is growing concern that without an approach that ensures customers’ own key patents to their new solutions, tech companies will use the knowledge to enter their customers’ market and compete against them — perhaps even using the IP that customers helped create.”

The seven Shared Innovation Principles are designed to address that concern. Smith outlined them as follows:

  1. Respect for ownership of existing technology. We each own the existing technology and IP that we bring to the table when we partner together. As we work with customers, we’ll ensure that we similarly will each own the improvements made to our respective technologies that result from our collaboration.
  2. Assuring customer ownership of new patents and design rights. As we work together to create new technology, our customers, rather than Microsoft, will own any patents and industrial design rights that result from our shared innovation work. Smith added that, under this principle, “Microsoft will cooperate in the filing of any patent applications resulting from the new invention work. This also means that Microsoft will assign to the customer all of the rights, titles and interest in the patents we create together.”
  3. Support for open source. If our shared innovation results in the creation of source code and our customers so choose, Microsoft will work with them to contribute to an open source project any code the customer is licensed to use.
  4. Licensing back to Microsoft. Microsoft will receive a license back to any patents and design rights in the new technology that results from the shared innovation, but the license will be limited to improving our platform technologies.
  5. Portability. We won’t impose contractual restrictions that prevent customers from porting to other platforms the new, shared innovations they own.
  6. Transparency and clarity. We will work with customers to ensure transparency and clarity on all IP issues as the shared innovation project moves forward.
  7. Learning and improvement. We’ll continue to learn from this work and use this learning to improve further our shared innovation work.

Smith concludes: “We believe this initiative and these principles offer a path that will ensure that the co-creation of digital technologies creates new economic value to companies throughout the economy and around the world, rather than for just a few select companies in the tech sector. And of course, it’s a path that we believe will enable Microsoft to continue to grow as well. In short, it strikes a balance where we and our customers can each focus on what we do best, working together with trust and confidence that we will help each other become more successful.”

Source: Official Microsoft Blog

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