Innovation Not Regulation

Andrei Iancu

December 1, 2023

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Episode 10 in Season 3 of the Cipher Vision Podcast series features Andrei Iancu, Partner at Sullivan & Cromwell and former Director of the USPTO.

Andrei joined us to discuss fostering an environment of strong innovation, through supportive intellectual property rights and laws. He highlighted the need for regulation to strike a balance, to encourage investment in innovation and not discourage companies with excessive hurdles.

He chats to the hosts of the Cipher Vision podcast, who are:

Conversation Highlights

Why do we need to have strong IP rights?

It is not possible to have innovation at scale, without a robust system of intellectual property rights.

Innovation, by definition, is risky. You are creating something new and you do not know if it’s going to work. On top of that, not only is it risky it is costly.

Intellectual property rights incentivize and protect innovation.

Do waivers or compulsory licenses maximize innovation?

It’s counterproductive and entirely misguided.

If technology can be appropriated immediately upon launch and success, what’s the investment? What’s the incentive for companies to do it?

More importantly, it will shake the confidence of all investors in all areas of technology, that if some government or collection of governments decide that their technology is in the midst of an emergency of sorts, their IP rights can be waived.

If the free-market economies do not incentivize their companies to invest at the maximum of their ability in these risky technologies, then the field will be ceded to others.

On the benefits of market competition

Healthy competition between companies and between nations when it comes to innovation is good for humanity, because it encourages more creativity and more innovation brought to the market.

I think there are two prongs to the way we approach IP and China. One is to encourage them to stop IP theft, but the other one is inward-looking. And it’s even more important, in my opinion, to make sure that we maximize our innovation capability.

The relationship between regulation and innovation

It’s really important to encourage investment in innovation that’s necessary for those standards. And at the same time, it’s important to provide access to implement those technologies. So, you need to have an appropriate balance be struck. And you cannot do that with adding regulatory hurdles.

What does the future hold?

I’m a strong believer in the innovation ecosystem. I think human beings naturally are inclined to be creative.

Having a robust system of intellectual property laws, and rule of law that people can rely on, I think that will go a long way to maximize the creativity of human beings.

I’m very optimistic, because at every turn, since the first industrial revolution, innovators have broken through. In country, after country around the world.

Andrei’s Key Takeaway

People need to focus on the importance of the intellectual property ecosystem to the innovation economy.

Everybody needs to realize that innovation and IP are inextricably linked. And you cannot have a strong innovation economy without a robust intellectual property ecosystem.

Nigel Key Takeaway

The big question is, how should governments and regulators react? Move too quickly and you risk fixing something that’s not broken, and with unintended consequences.

But without someone at the helm, there is a risk that a patent system developed for the first industrial revolution simply can’t cope with today’s pace and quantity of innovation.

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