2003 Nokia's IPR Director on their "Offensive IPR Strategy"
In a recent book on "Leveraging IPR in the Communications Industry", Ilkka Rahnasto, Vice President and Director of IPR at Nokia Corporation, Finland, explains the characteristics of "defensive" vs "offensive" IPR strategies. The latter, as practised by Nokia, include "strategic planning of the use of intellectual property rights in the business, proactive litigation of intellectual property rights and active lobbying for new intellectual property legislation."
The book "Intellectual Property Rights, External Effects, and Anti-trust Law - Leveraging !IPRs in the Communications Industry", by Ilkka Rahnasto, Vice President and Director of IPR at Nokia Corporation, Finland was published by OUP in Feb 2003 and is sold in UK at a price of £65.
The book is a candid discussion of the public pro's and con's of strong IP rights in industries with powerful network effects, examined through the prism of arguments presented in various legal jurisdictions, and courts' reactions to them.
Here he sets the scene: in a world where products and services combine different technical and creative components, IPRs are no longer just a way of preventing direct copying -- they should be seen first and foremost as a way for companies to influence other companies and how they allocate their resources.
- 1.14 p. 6: "One of the traditional views is that intellectual property rights are necessary for individual companies in order to protect their investment and to exclude imitations. This may still be an important reason for business firms to rely on intellectual property protection. However, this book is based on the presumption that
- *intellectual property rights are strategially important because with patents and copyright is possible to control other firms' behaviour and influence the manner in which they allocate their resources**" (emphasis original) 1.15 During the second half of the twentieth century, intellectual property rights were for a long time the cornerstone of the serial model of innovation. Companies were developing their own products, authors were writing their own books and more recently software developers were writing their own computer programs. From the social and economic perspective, it was desirable that those who were first in doing something were granted limited exclusivity to their results. It was even concluded that it was desirable to encourage such activities, so it was clear that one should not deliberately copy what others were doing. Unless your strategy was based on copying of others' products, this conclusion was not partiularly interesting for anyone engaged in the development of business strategies. Consequently companies adopted either passive or active intellectual
property strategies. A passive intellectual property strategy meant that the company adopted a strategy of investing in intellectual property rights as little as possible. An active intellectual property strategy meant that the company was actively organizing the detection of new innovations, was patenting its innovations, protecting its trade marks, clearing new products against prior rights and attacking imitators. Since most of this had seldom any direct impact on the success of the company, it was not surprising, as one commentator identified, that patents were long considered to be an uninteresting subject for study and business strategy . In many countries, copyright was similarly seen as only being a part of cultural policy, as the legislation was relevant only to the experts of collecting societies and media houses . 1.16 The approach has changed. Intellectual property rights have gained new popularity as ingredients of industrial policy. At the same time, entirely proprietary product concepts are giving way to products and services that combine various technical and creative components. A successful business strategy is increasingly based on intellectual property rights because through intellectual property rights it is possible increasingly to control the activities of other companies. Accordingly, companies are adopting either offensie or defensive intellectual property strategies.
An offensive intellectual property strategy is based on strategic planning of the use of intellectual property rights in the business, proactive litigation of intellectual property rights and active lobbying for new intellectual property legislation. A defensive intellectual property strategy is aimed at minimizing any effects the intellectual property strategies of others may have on the business of the company.
It is clear from this that Nokia itself is pursuing an "offensive IPR strategy".
This was also cited recently as a reason for an employee of Nokia to withdraw from the company:
2004-12-08 Lars Wirzenius: No Nokia ("Before I joined Nokia I had formed an understanding that Nokia was using and would be using its patent portfolio defensively [..] the reality was quite horrible")
In recent years, Siemens has been engaging in and talking about the same kind of "offensive IPR strategy".