Patent-driven innovation is powering the digital economy

The recent introduction by Apple of its virtual reality (VR) headset is an example of how new products are often driven by intellectual property (IP) assets.

Apples new VR headset is powered by the companies own chip, requiring processing by a new high-speed sensor, which helps reduce motion sickness.

Apple says its new device is its most advanced ever – requiring the filing of 5,000 patents.

As Jérôme Plante-Bordeneuve, director in charge of managing French multinational technology and aerospace company Thales’s technological assets has explained – new ideas are key to a company’s future – but protecting those ideas and leveraging their intellectual capital is just as important.

Legal scholars and economists have regularly pointed to the ability for the patent system to help stimulate innovation by permitting property rights on new inventions – where businesses can leverage IP to create economic growth. The Organization for Economic Co-operation and Development (OECD) has noted that patent protections stimulate high-tech focused expenditures on research and development.

One study cited by Forbes magazine found that companies typically earn a 40-60% premium when utilizing patents – and over 80% of U.S., European, and Japanese businesses indicated they rely on information disclosed in patents to remain technologically competitive. Notably, the biggest job creating industries of the last several decades (e.g., electronics, e-commerce, biotech, and software) – were all powered by IP protected inventions.

As a result of patents, inventors wish to share their discoveries to maximize returns from their commercialization.  Hence, the protections offered by patents serve as a stimulus to technological information exchanges. For example, patents enabled the licensing of proprietary technology across disparate industries (telephony, electronics, computing and software) produced the global smartphone industry.

As patents strongly correlate with increased innovation and corporate profits, companies can and should seek to fully identify and utilize their patentable assets.