Wednesday, October 03, 2007

The IP world is not for the weak minded

Interview with Peter Vanderheyden, Vice President, Global Intellectual Property, LexisNexis




In a world now awash with free information it is easy to forget that there are still many companies out there making a good business from selling data, not least traditional online services like Dialog, LexisNexis, Questel, and STN International.

The raison d'ĂȘtre of these proprietary online services — which pre-date the Internet, and started out as dialup services — has always has been heavily focused on selling value-added data at premium rates, primarily to businesses, research libraries, and large legal firms. And the jewel in the crown of these services was always the patent databases that they offer — not least because they were able to sell access to them at very attractive rates.

Evidently, the patent information market is still considered a good business to be in: Last month LexisNexis (a division of publishing behemoth Reed Elsevier) launched a new web-based patent product called TotalPatent. This is not so much a patent database, as a collection of patent databases. As LexisNexis boasts, TotalPatent is, "the world's largest collection of searchable full-text and bibliographic patent databases".

More precisely, TotalPatent offers access to around 60 million patent documents from 22 of the world's largest patent authorities. It also includes content from 500 scholarly journals published by LexisNexis' sister company Elsevier, a number of advanced analysis tools like PatentOptimizer, and machine translation capabilities. For this, customers pay an annual subscription charge of $2,000 per user.

But it would be wrong to suggest that all is dandy in the value-added patent information market. Like most providers of proprietary information, paid-for patent information services face increasing competition from free sources on the Web, including the Google Patent Service, and an ever growing quantity of free data provided by the world's major patent offices (PTOs).

In fact, PTOs first entered the electronic patent information business way back in the mid-1990s, when they started offering CDROM products of patent information. And with the arrival of the Web, they began providing patent information on the Internet for free. Since then their offering has constantly grown and expanded over time. Moreover, while initially providing just raw data, some PTOs have begun to offer value-added data as well, and so now directly compete with commercial providers. The European Patent Office (EPO), which runs the esp@cenet service, has been particularly aggressive in doing this.

Unsurprisingly, this was controversial from the beginning, with private vendors warning that if they continued to offer free information PTOs would force commercial providers out of the market, leaving the distribution of patent information in the hands of a small group of state monopolies.

Yet 12 years later, LexisNexis clearly believes there remains a healthy market for valued-added patent data. TotalPatent undoubtedly cost a considerable sum of money to develop — money LexisNexis would not have invested had it not been confident that it could recoup it, and make a healthy profit to boot.

Is LexisNexis living in cloud cuckoo-land, or is it rightly confident that valued-added patent information will remain a good furrow to plough — even in a world flooded with free information?

I have been curious about current thinking inside commercial information vendors for a while now. So when I was invited to talk about the launch of TotalPatent with Peter Vanderheyden — vice president of global intellectual property at LexisNexis — I took the opportunity of raising some of the wider issues with him as well.

Vanderheyden has been in the patent information business for ten years. Amongst other things, he was involved in the development of the first free patent information service to be launched on the Web — IBM's Patent Server. This was released as a free service in 1997, but later re-engineered as a proprietary paid-for service called Delphion, and eventually sold on to Thomson's Derwent.

So what is Vanderheyden's take on the current environment for paid-for patent information services? While expressing confidence that the market remains a good one, he did not hide his irritation (anger even) at the activities of the EPO, and echoed the oft-repeated claim that this was threatening the viability of commercial providers. He also suggested that the EPO's actions had chilled innovation, and held back the development of new patent information services.

It is also clear that these are sensitive issues — as evidenced by LexisNexis' stipulation that I only publish the interview with Vanderheyden if I attach a statement indicating that his answers represent Vanderheyden's personal opinions alone, not the official position of LexisNexis, or its parent company, Reed Elsevier.

For me the experience was instructional. Having spent the last couple of years speaking to leaders from the various free and open movements I had formed the impression that there arenow two very distinct cultures driving the so-called "information economy," and that an ever widening gulf separates these two cultures. Venderheyden's answers to my questions appeared to confirm this.

What are these two cultures? On the one hand is the traditional corporate culture, and on the other what one might call a new culture of "the commons".

The former tends to be very narrowly focused on corporate missions, market opportunities, business strategies, and things like cash cows, and "budget realities" — usually without any reference to wider society (other than acknowledging that that is where a company's customers come from). The latter, while not anti-business, tends to take a much broader view of the world, and of society, and is often deeply interested in ethical issues, and "the public good".

What this means in practice is that corporate culture views information as essentially an asset to be exploited for commercial gain, and those who subscribe to this culture assume therefore that the default position is that information should be treated as a product to be bought and sold. Those who subscribe to the culture of the commons, by contrast, believe that information is most useful when it is shared by as many people as possible, and used to promote social good. For them, therefore, the default position is one in which information is freely available to all.

That there has been a serious breakdown in communication between these two cultures first became apparent to me when I interviewed the founder of the Free Software Movement, Richard Stallman.

When I reminded him that companies lock up their content with digital rights management (DRM) technologies because in a digital environment information can be so easily copied (which reduces its value as a commercial product), Stallman snapped back that operating from purely selfish motives is no excuse for mistreating people. (Stallman, like many, believes that DRM is socially unacceptable, since it erodes both freedom and privacy).

He added, "There is this bizarre idea nowadays that all a person has to do to excuse nasty treatment of others is to say: 'I am just trying to make money.' As if making money were so admirable that it could justify absolutely anything. 'Oh, I punched him in the nose; but I am trying to make money, so let me do it.'"

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If you wish to read the interview with Vanderheyden please click on the link below. I am publishing it under a Creative Commons licence, so you are free to copy and distribute it as you wish, so long as you credit me as the author, do not alter or transform the text, and do not use it for any commercial purpose.

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To read the interview (as a PDF file) click here.

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