Rethinking Innovation:
IP, Policy, and the Path to Industry Revival
Part II:
Intellectual Property in a Globalized World: Is It Still a Safe Bet for Innovation?
In the first part of their conversation about “Rethinking Innovation: IP, Policy, and the Path to Industry Revival”, Dr. Thomas Leiber, an entrepreneur and innovator in automotive technologies, and Dr. Hans-Jörg Feigel, an industry veteran with extensive expertise in automotive policy and intellectual property (IP) protection, explored the critical role of innovation for established companies to remain competitive and what they can learn from startups.
SUMMARY
In the second part of their discussion, the focus shifts to the challenges and opportunities companies face in protecting intellectual property (IP) in today’s increasingly globalized world and rapidly evolving technological landscape. As advancements in AI, blockchain, and other emerging technologies continue to reshape industries, traditional methods of managing and safeguarding IP are being put to the test. The pressing question is: How should companies and countries adapt their approach to IP in this dynamic and fast-changing environment?
Dr Feigel highlights the growing difficulty of safeguarding patents, particularly in Asia, where IP violations were once widespread but are now evolving into more aggressive patent strategies. He advocates for a more harmonized global IP framework to address the intensifying competition and improve cross-border protection. Feigel also suggests leveraging technologies like blockchain to increase transparency and enhance enforcement, as well as the development of international patent standards to facilitate easier recognition and protection of IP rights across borders.
Dr. Leiber concurs on the need for global harmonization of IP laws, proposing penalties for deliberate patent infringements instead of tariffs to ensure fair competition. He underscores that simply filing patents is insufficient; companies must actively leverage their IP to drive innovation and market success. He advocates for non-exclusive licensing and strategic IP use to accelerate market adoption and foster collaboration. Additionally, Leiber stresses the importance of increased venture capital to support startups, helping them compete on equal footing with larger companies, and nurturing a culture of innovation. Regional disparities in IP enforcement remain a challenge, highlighting the need for legal systems that better support smaller companies and innovators.
Both experts agree that while emerging technologies like AI and blockchain present new opportunities to improve transparency, streamline IP management, and reduce litigation, they also necessitate legal adaptation. Dr. Leiber emphasizes that AI can enhance creativity and productivity, but human-led innovation remains essential to ensure the originality and legal validity of patents. Both Dr. Feigel and Dr. Leiber caution that while AI and blockchain can offer efficiencies, the human element in the creative process and patent drafting remains indispensable.
They core elements of the discussion can be summarized as follows:
THEMES
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Critical for Startups: IP protection remains vital for startups, as it often represents their only defense against larger competitors.
Filing Patents is Not Enough: Filing patents alone is insufficient; companies must actively leverage their IP by turning it into market-ready products.
Missed Opportunities in Europe: Many large European companies fail to fully utilize their patents, leaving untapped potential for innovation.
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Non-Exclusive Licensing: Sharing IP through non-exclusive licenses can accelerate market adoption and foster collaboration across different parties.
Reinvestment into Innovation: Revenue from IP (e.g., "patent taxes") should be reinvested into innovation ecosystems to support sustainable growth.
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Geopolitical Disparities: IP protection is difficult to enforce in some regions, such as Asia (China, Korea), where local courts may favor domestic companies.
Harmonizing IP Laws: Global IP laws need alignment. Strategies include creating an international patent standard and enhancing the TRIPS agreement, as well as imposing penalties for deliberate infringement.
Innovator-Friendly Shifts: The Unified Patent Court (UPC) in Europe and the PREVAIL Act in the US signal a shift toward stronger protections for innovators.
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AI in Innovation: AI is a powerful tool to enhance creativity and productivity, but it must be complemented by human innovation to ensure legal validity in patents. AI can assist with content generation but complicates the identification of inventors.
Global Variance in AI Patents: AI-assisted patents are granted at high rates in countries like the US, China, and Korea, but the EU remains more restrictive, with a much lower grant rate for AI-driven patents.
Blockchain for IP: Blockchain has the potential to increase transparency and simplify IP documentation. It can transform IP into a tradable asset class, reduce patent litigation, and enhance trust between startups and large corporations.
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Startups and Corporations: Startups drive innovation and risk-taking, but need better access to capital to compete on equal terms with larger companies. Larger corporations can provide valuable resources for collaboration.
Cultural Shift in IP: There needs to be a cultural shift in companies to focus on leveraging IP to create value, not just owning patents. A culture of innovation should be fostered to actively use IP in the marketplace.
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Legal Systems Must Adapt: Emerging technologies like AI and blockchain require the legal system to evolve. Current IP frameworks must adapt to new challenges in order to remain effective.
Patent Trolls and Litigation: Patent trolls and inefficient litigation erode trust between startups and large corporations. Legal systems need to streamline processes to foster collaboration and fair play in the IP ecosystem.
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International Collaboration: Global IP laws must be harmonized to ensure fair competition, despite regional challenges and geopolitical tensions. As emerging markets like India grow, their role in shaping global IP standards will become more significant.
Economic Shifts and Free Trade: Free trade agreements, such as those between the EU, India, and Mercosur, could promote regional standardization of IP laws. These shifts will encourage innovation and foster better collaboration across borders.
PART II
Intellectual Property in a Globalized World: Is It Still a Safe Bet for Innovation?
INTERVIEW
Earlier, we discussed how innovation, a strong innovation culture, and collaboration between large companies and agile startups can help established companies navigate crises.
Taking that conversation further, do you think protecting intellectual property still makes sense in today’s globalized world, or has globalization made IP protection less meaningful?
Feigel: Patents are still being filed, but it’s becoming increasingly difficult to protect them, especially against Asian countries, where intellectual property (IP) violations have historically been common. That said, IP protection remains crucial for startups, as it can often be the only way to safeguard innovations. Interestingly, as Chinese companies become more aggressive with their IP strategies, they’re not only using patents to protect their own innovations but also strategically challenging the patents of others.
In the past, some Asian countries paid little attention to intellectual property rights, but the situation has drastically changed. Today, an enormous number of IP rights are being generated in these regions, which poses significant challenges for companies in the West.
“Although enforcing IP rights in Asia is still time- and effort-intensive, the growing volume of patents being filed there indicates that the global competition for intellectual property is intensifying, which will likely cause significant problems for businesses in Europe in the near future.”
– Hans-Jörg Feigel
Leiber: Exactly. IP protection is critical for small companies, even if they don’t have the same resources to defend them. But it’s not just about having patents; it’s about creating a culture where innovation is valued and leveraged.
“Many large European companies don’t fully use their patents, which is a missed opportunity.”
– Thomas Leiber
Many have heard Elon Musk say that "intellectual property is for losers." What he really meant is that if you file patents and keep innovation locked away, or if you only buy IP to enforce against infringers, you’re not genuinely creating value.
It’s essential to file patents, but even more critical to move quickly and turn them into actual products. In some cases, giving away IP for free can help accelerate market adoption or new forms of collaboration. However, any licensing should always be non-exclusive to foster the speed of adoption.
Historically, US companies have had the advantage of quick market entry due to better access to funding, a benefit not yet available in Europe. More funds should be channelled into venture capital to level the playing field, particularly in later-stage investments. This would allow start-ups and established companies to collaborate more effectively and on equal terms.
“intellectual property is for losers.”
– Elon Musk
As the world becomes more interconnected, how can IP laws evolve to protect creators without stifling cross-border innovation?
Feigel: There isn’t a one-size-fits-all approach to intellectual property, but aligning global standards could significantly strengthen protection. To further develop patent legislation in a globalized world, several strategies should be pursued. These include improving harmonization and introducing an international patent standard, allowing IP rights to be more easily recognized across different countries. The TRIPS agreement should be further developed to enhance patent protection. Additionally, technologies like blockchain can help document inventions, increasing transparency and traceability. Bilateral or multilateral agreements between countries could also improve cooperation in cross-border patent applications and disputes, while a global information system on existing patents would allow inventors to identify potential conflicts more easily. To enable faster decisions, bureaucratic hurdles should be reduced, ensuring a more efficient process for patent enforcement globally.
Leiber: While the value of Intellectual property varies from country to country, challenges remain. In countries like Korea, Intellectual Property is often less valued because courts tend to favour local companies and reward patent infringement with very low infringement penalties. In the US, during the Obama presidency, US IP laws became increasingly favourable to Big Tech, with industry representatives advising the government. The PTAB was mainly used by large corporations to become mostly immune to third party intellectual property.
A promising trend reversal can be seen in the statistics of decisions of the new Unified Patent Court (UPC) in Europe, which is seen as more innovator-friendly. The UPC has become the preferred venue for enforcing patent rights and might influence the patent courts of various EU member states.
In the USA, the Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL Act) is moving forward, signalling a move towards stronger protection for innovation. The resignation of Kathi Vidal as head of the US Patent and Trademark Office (USPTO) and the appointment of Howard Lutnick (owner of an extensive patent portfolio) as Under Secretary of Commerce is another sign of a potential trend shift in the US in 2025.
Harmonizing international IP laws remains challenging, but with increasing demand for innovation, the future jurisdiction is expected to favour more innovators, especially in industries where patented technologies are critical for global competition. Instead of import tariffs, introducing high penalties for deliberate patent infringement—especially when technology is copied across regions—could be an effective strategy. This approach would create a more level playing field, encouraging innovation in both Europe and China.
Finally, revenue from "patent taxes" should be reinvested directly into innovation, where it originated. The US is a good example of how private funding drives innovation more effectively than government investments.
Feigel: The global trend is shifting towards more localized policies, and international agreements seem to be losing their impact. Still, I’m optimistic we’ll eventually move toward a more unified approach.
Leiber: Currently, there is no cohesive strategy, and we see varying trends globally. Standardization and agreed-upon rules often clash with geopolitical tensions and tariffs. It will be interesting to see how India, a key beneficiary of these tensions, positions itself as it emerges as a major economy.
If the EU signs free trade agreements with India and the Southern Common Market (Mercosur) in the near future, it could pave the way for new standardization of intellectual property rights within these regions. A joint legal framework may emerge, aligning with a free-trade mindset.
Overall, governments should focus more on supporting smaller firms and innovators, as their contributions are crucial now more than ever. Increased venture capital funding for startups is essential, as they are often more willing to take risks and drive the boundaries of innovation.
Let’s shift gears and explore the impact of rapid technological advancements on intellectual property. In today’s fast-evolving tech landscape, what do you see as the biggest threats to IP, and what steps can companies take to better protect their innovations?
Feigel: Technologies like AI and blockchain won’t make IP protection obsolete. However, our legal systems must evolve to keep pace with these technologies. AI can generate content, but it’s hard to pinpoint the inventor. AI can also be used to track existing IP rights, so claims will need to be more robust. Blockchain helps with transparent IP documentation through smart contracts, which could ensure that inventors are paid more transparently. All this is more of an opportunity than a threat. Of course, the legal framework will need to evolve to guarantee rights, but I don’t see imminent danger coming from AI.
“To ensure legal validity, inventors should carefully draft their patents, using language that reflects personal creativity and includes original elements not generated by AI. The best results come from combining human creativity with the efficiency AI offers.”
– Thomas Leiber
Leiber: AI is primarily an efficiency tool designed to enhance creativity and productivity, enabling innovators to focus on what truly matters: creative thinking. However, its role in innovation varies across different jurisdictions. In places like Japan and the US, the regulations are more flexible, while the EU tends to be more restrictive.
When you ask ChatGPT a question, the answer itself is not inherently inventive. However, it can help structure your thoughts by providing quick access to technical information—such as mathematical formulas or specifications—that would otherwise require time-consuming research. As you refine your prompts and incorporate your own creative input, AI can assist in generating results that are novel and potentially innovative. That said, patent claims still need to be drafted by humans, as the creative process is inherently human.
There remains a degree of ambiguity in the use of generative AI in patent filings. In some jurisdictions, such as the US, Germany, Korea, and China, patents filed with the assistance of AI have high grant rates (80-90%). However, in the European Patent Office (EPO), the grant rate for AI-assisted patents has recently dropped to around 20%.
AI can certainly accelerate the patent drafting process, but it must be evaluated correctly. Humans must remain at the forefront of innovation to ensure patents are genuinely inventive.
Blockchain presents an exciting opportunity, though its potential for creating smart IP pools or simplifying licensing remains unclear. While blockchain could streamline licensing and reduce complexity, its adoption among large companies is still in the early stages.
Negotiating with multiple parties holding intellectual property rights can be cumbersome, and patent litigation often benefits only lawyers and patent trolls, eroding trust between startups and large corporations. Blockchain could transform intellectual property into a tradable asset class, much like cryptocurrencies, reducing litigation and increasing the value of innovative companies, enabling them to focus on product commercialization. IP tokens or pools could hold tangible value, similar to cryptocurrencies.
This is an exciting and evolving area, and as I continue to explore AI, blockchain, crypto, and NFTs, I look forward to delving deeper into these possibilities in the future.
Conclusion
In conclusion, while intellectual property faces increasing challenges in a globalized world, the rise of new technologies like AI and blockchain presents tremendous opportunities to enhance protection and foster innovation. Companies must navigate evolving legal frameworks and leverage these technologies to streamline IP management and reduce litigation. Ultimately, the future of IP will depend on a balance between stronger global cooperation, harmonization of laws, more inclusive funding for startups, and the ability to adapt to the fast-changing technological landscape, which offers both challenges and exciting possibilities for creators and innovators.
Outlook
Next week, we’ll release Part III of the interview, where Dr. Feigel and Dr. Leiber explore the future of the German automotive industry and the role that innovation and intellectual property will play in turning things around.