Intellectual Property in Quantum Computing and Market Power: A Theoretical Discussion and Empirical Analysis (Oxford University Press)

Delighted to see our article ‘Intellectual Property in Quantum Computing and Market Power: A Theoretical Discussion and Empirical Analysis’ -co-authored with my talented friends Prof. Mateo Aboy, PhD, SJD, FIT and Prof. Timo Minssen- published in the Journal of Intellectual Property Law & Practice (Oxford University Press), the flagship IP peer-reviewed OUP Journal, edited by Prof. Eleonora Rosati. Thanks to the JIPLP team for excellent editorial support! Our article: https://academic.oup.com/jiplp/article/17/8/613/6646536

This piece is the sisterpaper of our Max Planck @ Springer Nature published article titled ‘Mapping the Patent Landscape of Quantum Technologies: Patenting Trends, Innovation and Policy Implications’, which we wrote in parallel. The IIC quantum-patent study can be found here: https://link.springer.com/article/10.1007/s40319-022-01209-3. Our teamwork was absolutely gratifying and we hope it will inform strategic, evidence based transatlantic policy making.

Mauritz Kop, Mateo Aboy and Timo Minssen published their article titled ‘'Intellectual Property in Quantum Computing and Market Power: A Theoretical Discussion and Empirical Analysis’' in the Journal of Intellectual Property Law & Practice (Oxford University Press).

Intellectual Property in Quantum Computing and Market Power

Please find a short synopsis of our work below:

The article authored by Mauritz Kop, Mateo Aboy, and Timo Minssen examines the role of intellectual property rights (IPRs) in the burgeoning field of quantum computing, exploring both their potential to incentivize innovation and the risks of creating anti-competitive environments.

Core Arguments and Objectives:

Balancing Innovation and Competition: The authors posit that while IPRs aim to promote scientific progress and fair competition, an over-proliferation of exclusive rights can stifle research, development, and equitable access to technology. A balance is crucial, especially for revolutionary technologies like quantum computing.

IPRs in Quantum Computing: The article investigates which IPRs (patents, copyrights, trade secrets, chip rights, design rights, trademarks) are currently applied to quantum computing components (hardware, software, algorithms). It notes that different IP rights can protect various layers and components of quantum computers, from qubits and processors to software and algorithms (when applied to solve specific technical problems).

Market Power and Innovation Distortions: A central question is whether the strategic use of overlapping IPRs (IP portfolio approaches) could lead to excessive market power for first movers, creating "anticommons" concerns (where too many rights holders block innovation) and hindering downstream innovation.

Quantum-AI Hybrids: The paper acknowledges the increasing convergence of quantum computing and AI, which could further complicate the IP landscape and presents new challenges for legal frameworks.

Research Methodology:

The article employs a mixed qualitative and quantitative approach:

Theoretical Discussion: It reviews existing literature on IPRs, market competition, and the "Tragedy of the Anticommons," applying these concepts to the unique aspects of quantum technology.

Empirical Analysis: The authors present findings from a patent landscape study focusing on quantum computing (using CPC code G06N10). This analysis identifies patenting trends, leading countries and organizations, and types of claims being granted.

Key Findings from Empirical Analysis:

Rapid Growth in Patenting: A significant surge in quantum computing patents has occurred, with 64.7% of patents (from 2001-2021) granted since 2018. The compound annual growth rate (CAGR) for quantum computing patents (42%) is higher than for quantum technologies overall.

Leading Patent Holders: IBM, D-Wave, and Northrop Grumman hold the largest patent portfolios, but new entrants like Google and startups such as Rigetti are also establishing significant positions, indicating that IP can enable market entry and attract investment.

USPTO Dominance: The USPTO has granted the vast majority (91.22%) of the identified quantum computing patents, though the Chinese patent office has recently surpassed the EPO in grants for this subfield.

Public Domain Contribution: A notable portion of quantum computing patent applications are not granted and thus enter the public domain, which can raise the bar for future patentability and encourage disclosure over trade secrets. The authors suggest that many granted patents may also enter the public domain before the quantum computing market reaches mass maturity.

Discussion and Potential Responses:

No Current Overprotection Problem in Patents: The empirical data, particularly for quantum computing patents, does not strongly suggest an existing overprotection problem or severe anticommons scenario that is hindering innovation in this specific branch. The patent system appears to be incentivizing public disclosure.

Trade Secrets as a Concern: The authors note that legal uncertainty or overly strict patent eligibility could shift protection towards trade secrets, which might impede information dissemination and follow-on innovation.

Need for Balanced IP Policies: The article emphasizes the need for quantum-IP law policy to find a middle ground between underprotection and overprotection, aiming for an "innovation optimum" and legal certainty. This involves considering the interplay of various IPRs with antitrust law and other regulatory mechanisms.

Innovation Policy Pluralism: Policymakers should consider a mix of IP alternatives (antitrust, contract law, tax law, standardization, prizes, subsidies) and differentiate between economic sectors when designing solutions.

Future Considerations: Shorter IP protection durations for quantum/AI innovations and utility models have been proposed but require substantial evidence. The focus should be on building flexible innovation architectures.

Ethical and Societal Implications: The development and governance of quantum technologies must consider broader ethico-legal frameworks, ensuring they align with democratic norms and fundamental rights. Output from autonomous quantum/AI systems without human intervention should ideally enter the public domain ("Res Publicae ex Machina").

Conclusion:

The article concludes that while theoretical concerns about IP overprotection in quantum computing are valid, current empirical patent data does not indicate a crisis demanding immediate radical reform of IP regimes for this specific technology. However, the field is rapidly evolving, and developments in trade secrets or state secrets remain less visible. Therefore, a continuous, mixed qualitative-quantitative approach is necessary to monitor these dynamics. Policymakers, research institutions, and market players must proactively develop IP strategies that encourage healthy competition, incentivize sustainable innovation, facilitate technology transfer, and safeguard fundamental rights within a thriving global quantum ecosystem. Further interdisciplinary research is needed to investigate IP portfolio strategies, trade secrets, patent thickets, and property fragmentation in the quantum domain.