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The Borg

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• Author: David Leahy
• September 28, 2008
• Category: business

You know the Borg, probably the best of the Star Trek villains, and famous for their catch phrases “You must comply. You will be assimilated”. No ifs, no buts, no negotiation. You’d think that if the Borg really had assimilated the knowledge and culture of thousands of species, at least one could have added a few inter-personal skills. I think of the Borg whenever I hear someone say “You must protect your IP” to somebody trying to start a business. Usually this is offered as a piece of of unquestionable wisdom, no ifs, no buts, no negotiation.

You will have this mantra rammed into you if ever you raise your head above the parapet with the glimmer of a new business idea. For academics, the fount of science-based business ideas, this is doubly true and may well be written into contracts, along with other threatening statements about conflict of interest, which are intended to protect the University, but simply end up putting people off the whole idea. The logical consequence is that the academic should not openly publish and communicate their ideas. They should not freely collaborate with other scientists, especially those in business, at least not without all the paraphenalia of confidentiality agreements and contracts. It is easy to argue against this from a happy clappy, let’s all share for the good of science perspective, that this is not a good thing. That won’t get you far against the Borg though.

Widget businesses that make and sell real things that can be easily copied may need patents. The obvious example is a new drug or appliances like the Dyson bagless vacuum cleaner. Even in these cases it is not always obvious what should be protected. The Singer sewing machine was an entirely new sort of machine and most of it was novel, but Singer only patented the eye. He knew that without the eye it didn’t work, so that was the only IP he protected. Widget businesses are not the only sort of course, in fact I suspect that most new business ideas arising from University research are not based on widgets, but know-how, and the big difference between a widget and a know-how business is that the know-how has two legs. So I’d like to think that those Universities that are good at spin out activity succeed because they look after and encourage their people. They should aim to create millionaires, not spinouts. People create businesses, not IP. Its a hard slog all the way up to the top of the mountain and there isn’t usually an alternative to that daily grind. “Protect your IP” is often thought to be the helicopter that will get you to the top without effort.

The Borg confuse IP with know-how partly because it suits. If your detailed understanding of a signalling pathway in some bacterial system is IP, then it is owned by your employer. If it is know-how then it is yours and you can do what you will with it, as long as you could leave with everything in your head and nothing in your briefcase. Software is a good example of this, since the Borg see it as IP with the justification that the copyright is owned by the employer, as is normally the case. However, where software is open source licensed either virally or through choice, then that is no longer the case. Even if it were, the software was created by know-how on legs and can easily be recreated. So for the early stage business idea based on software, if you upset the developer you lose the business.

Science and software development have a number of thing in common. In particular, they explicitly build on other ideas and creations. As the Borg assimilate more of this know-how into IP in the form of patents, copyright and database rights, more and more of the landscape becomes fragmented and inaccessible. This creates an “anti-commons” where the transaction costs (the CDA’s, contracts, licensing fees) of putting together the components are so high that nothing is done with it.  This is not just damaging to pure science, but also business. Some years ago I was invited to join an EU research consortium to develop some predictive methods for alternatives to animal experimentation. There were 32 partners from academic groups across Europe and the Borg had got to the contracts. These said that “all IP was to be jointly owned by all consortium members and should any one partner wish to commercialise any of he findings they would need to negotiate licensing and royalty agreements with all the others. In practice the cost and difficulty of negotiating the 32 agreements (in about 25 countries and 15 languages) destroyed any potential commercial value. Of course, since all the findings were likely to be know-how, and probably published, any single partner could easily argue that they were free to use the know-how anyway and just go ahead. However, this would leave a great gaping hole in the future prospects of the business that used the IP, having had involvement in the consortium, in the form of litigation. It wouldn’t matter if legally the litigation didn’t have legs, the threat would be enough to scare away customers and force the business to settle.

I could give other examples, but my general experience has been that the Borg and the anti-commons they have created, destroy rather than create commercial value.

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