The Evolving IP Marketplace: Aligning Patent Notice and Remedies ...

and costs have fallen. As a representative of the company explained, by combining P&G’s11internal innovation with outside sources, “one plus one makes three or five instead of two.”Similarly, to create new products, large pharmaceutical and biotechnology companiesoften depend upon external sources of technology, including universities, start-ups and12collaborations with other companies. Start-ups typically develop early-stage technology,perhaps obtained from a university, and move it closer to a viable product. If successful, theymay partner with or become acquired by a pharmaceutical company, which tests andcommercializes the product. For many large pharmaceutical and biotech companies, a majority13of their approved drug products begin with externally developed technology.Companies in the information technology (IT) sector also acquire new, externally14developed technology. As one commentator explained, technologies have become so complexthat it is not feasible for any one company to be the source of all the innovative aspects of a15product. Companies must look outside. One panelist reports that open technology16development has “thrived” in the software and internet industries. IT companies use a varietyof mechanisms to bring in new technology, including acquisition of start-ups, collaborative17arrangements, and IP licenses. For instance, a manufacturing company may take a license11Miller at 148-50, 154 (3/18/09).12Myers at 220-21 (3/18/09).13Graham at 137 (4/17/09); see, e.g., Shafmaster at 214 (3/18/09) (of seven therapies produced byGenzyme in the last six years, five are protected, in part, by intellectual property in-licensed fromuniversities, and two are based on intellectual property acquired by Genzyme).14Cockburn at 188-89 (4/17/09); Rogers at 103 (3/18/09) (in the past four years, Qualcomm has acquiredover a dozen companies); Yen at 47 (12/5/08) (Cisco has acquired 130 companies, mostly start-ups, tobring in new technology); Valz at 236 (12/5/09) (“small entities that are actually producing greattechnology along side IP will get noticed and will do really well” in acquisition in the IT sector); Thomasat 73 (4/17/09) (reporting that “some [of] our most valuable intellectual property has come from smallercompanies”).15Phelps at 244 (5/4/09); Bergelt at 81-82 (4/17/09) (In IT industries, “we’re not doing siloed parlayedinvention of fundamental technologies the way we did 10 or 15 years ago. We’re now inventing higherup in the stack collaboratively.”); see also BRANSCOMB & AUERSWALD, supra note 2, at 43 (“By the1990s, firms began to out-source more of their needs for component innovation to small and mediumsized enterprises.”).16Valz at 235-36 (12/5/09).17Crean at 103 (5/4/09) (listing legal tools for importing technology into a large company).35