Open and Closed Innovation Management

Closed vs. Open Innovation Management in Biomedical Engineering

Open Innovation has been growing in popularity worldwide. However, it has been a prevalent phenomenon in the USA (which started some 15-20 years back). But much before open innovation was accepted, closed innovation had been the norm.

Let us probe this further in the context of Biomedical Engineering:

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What really is closed innovation?

In context of workflow within the closed innovation paradigm, the process which leads towards innovation is wholly controlled from top to bottom; all intellectual property is created internally and securely maintained within the company boundaries until the product under consideration is released into the market.

The Origin of Closed Innovation in Biomedical Engineering

Basic Premise: Lack of involvement by both governments and universities

One of the primary reasons that helped closed management of innovation at the turn of the 20th century is an absence of involvement by both governments and universities into commercial and industrial applications of scientific research.

The absolute lack of involvement encouraged companies to create their own Research & Development (R&D) department for perfectly controlling brand new product development procedure.

The era between the end of World War II and the mid 1980s can be very well called the “Golden Age of closed innovation R&D”. Several R&D departments of private biomedical companies were at the cutting edge of novel scientific research. Additionally, interference in internal R&D was seen as a strong obstruction by sneaky competitors, as large outside investments needed to be done to keep the company going.

Closed innovation carries a vertical integration (including manufacturing and sale services): the company has only itself to count on, especially considering critical engineering technologies. This is the time when “Not Invented Here” started surfacing: every bit of engineering technology from outside was viewed with suspicion and deemed unreliable.

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Tensions within Research and Development

Because objectives and priorities of people working for the R&D departments are not the same, there exists a latent tension within Research and Development itself.

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  • Research

Research follows the same concept as exploration, that of discovering a new border (probing the particular “why’s?” of a situation) which cannot be immediately anticipated or predicted. Biomedical engineers working in research do not appreciate constraints of time. Research is simply structured as a cost area: the objective here is to keep the budget under control.

  • Development

Development is associated with action, (the implementation of “how?” of a particular unfurling situation). Development is dependant on Research outcomes as its primary input. Development is spearheaded by engineers who solve problems under immense pressure with time and budget limitations. Unlike Research, Development departments are made as a profit generation center.

  • The Interconnection as a solution

To improve relations between Research and Development departments within a particular company and to untangle the knots between them, many companies set up a buffer zone that deals with the two. The buffer’s role is to store technology which emerges from the Research department until the Development department is ready to work with it.

During the post war age, many biomedical discoveries were “stored on the shelf” for several years.

In the closed innovation system, companies could invest in R&D by capturing a critical share of the market value of their technologies. In order to retain this share, it was imperative that talented people remained in the company and intellectual property was confidentially secured.

However, in numerous commercial sectors, several factors erode confidentiality, thus putting closed innovation systems at substantial risk. Companies that did not adapt to the downfall of closed innovation suffered great losses (e.g. Xerox).

Now Open Innovation largely rules the roost.

Open Innovation Utilized Medical Technology To Save Lives

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Top Biomedical engineering experts throughout the world now routinely share knowledge about novel medical technology, in an attempt to make life-saving breakthroughs even more widely available. More importantly, they ensure that copyrights, patents, and other legal constraints don’t obstruct that knowledge from reaching people who need it most.

Open Licenses Provide Life-Saving Technology in a Crisis

The lack of availability of ventilators has developed as a limitation in combating the Corona

virus, encouraging researchers to devise alternative options to the pre-existing machines in use, priced at $30,000 each. Spearheading this new wave of technology advancement are experts at

Universities like Rice and MIT , thus proving that open innovation isn’t just the responsibility of DIY hobbyists, but the world’s top biomedical engineering talent.

Biomedical teams are working tirelessly to adapt medical-grade supplies as well as hospitals to function as emergency substitute for ventilators in the absence of better equipments. (Other low-cost ventilator machines have already been developed by medical teams from Stanford, but would still need a year to increase manufacturing.)

When a crisis heightens the pre-existing flaws, innovators with a conscience can lead the way forward to save lives. A cursory read throughout MIT’s project resource page displays the perils and complexity of the project: the device should be both safe and useful, must not be false in its functionality, and must be accurate in measuring as well as presenting accurate data for doctors to be able to diagnose correctly. Apart from publishing its designs, the team is also publishing the detailed requirements that clinicians forwarded to them after testing the device. The team has published data on the device’s use on pigs.

This level of collaboration is achieved by open licensing, for example:  Creative Commons and free or “libre” software licenses, which offer easy sharing as well as modification of source material. Furthermore, sharing tech doesn’t necessarily translate to a dip in quality. On the other hand, scientists very well know that the only way to understand any problem and devise solutions is via open collaboration. No one should hold the absolute power to copyright or patent knowledge about combating a disease or building a life-saving device. Decisions about adjusting medical equipments in the field should be made public by medical and engineering professionals, not the attorney who helped patent it.

Some Companies Pledge To Not Enforce Their IP Rights

Old copyrights and patents that have no relation to COVID-19 can still affect COVID-19 research even today. In a paper about Labrador Diagnostics, it was revealed that Labrador’s entire portfolio of patents was copied from Theranos, the dubious blood testing company which had shut down in 2018. Labrador didn’t have a functioning product and Theranos’ technology involving its patents was suspicious at the very least. However, those patents still damaged possible lifesaving work. This is why it’s important that governments intervene to limit the damage caused by patent abusers and effectively combat the Corona Virus. Recently, lawmakers in Chile, Canada, Germany, Ecuador, and Israel took several steps to separate emerging COVID-19 research from patent abuse by introducing compulsory licenses.

Some companies have done their part to ensure that their intellectual property doesn’t interfere against COVID-19 research either. The Open COVID Pledge is one such example.  An IP owner can decide to not sue another company or organization for utilizing their research for COVID-19. Technology greats such as Unified Patents and Intel were the first two to sign this pledge. While the Open COVID Pledge is still a very narrow commitment as compared to persistent open licenses, but it is still an indication given by companies that they won’t obstruct the fight against this emerging pandemic.

Recently, lobbyists in support of patent owners have claimed that the current laws are not sufficient as far as protection of patents to fight COVID-19 is concerned. They even argue in defense for a bill which has been sponsored by Senator Ben Sasse (R-NE) that would add a further ten years to a patent’s term for medical devices and pharmaceuticals. It’s strange to consider the fact that the medical experts at the forefront of the fight against CoV are holding their creativity back until they obtain extra patent protections. This proposal also insults the reality that the public at large is already paying for a significant part of medical research in the USA—including research for inexpensive ventilators.

Therefore, it’s in the best interests of the public to have such technologies shared widely, not stopped by copyright and patent restrictions. This is what Open Innovation systems fight against.

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