Intellectual property in quantum computing and market power: a theoretical discussion and empirical analysis

Abstract

Mauritz Kop is TTLF Fellow and Visiting Scholar at Stanford Law School, Stanford University; Founder of MusicaJuridica and strategic intellectual property lawyer at AIRecht, a technology consultancy firm based in Amsterdam. His present cross-disciplinary, comparative research focuses on human-centred artificial intelligence (AI), the Ethical, Legal, Socio-Economic, and Policy Implications of Quantum Technology (Quantum-ELSPI), and sustainable disruptive innovation policy pluralism. Mateo Aboy is Principal Research Scholar in Biomedical Innovation, Precision Medicine, AI & Law at the LML, University of Cambridge and Affiliated Professor and Fellow at the Centre for Advanced Studies in Biomedical Innovation Law (CeBIL), University of Copenhagen. Timo Minssen is Professor of Law and the Founding Director of the Center for Advanced Studies in Biomedical Innovation Law (CeBIL), University of Copenhagen. Specializing in IP, tech-transfer, antitrust and the regulation of health and life science innovation, he is also a senior advisor at the Swedish law firm X-officio and a Quantum Law Researcher at Lund University. Abstract One of the central goals of intellectual property rights (IPRs) and related rights is to incentivize and reward creative and innovative efforts that promote scientific and technical progress and stimulate fair competition through the distribution and commercialization of technologies. Yet, an excessive proliferation of exclusive rights can also result in fundamentally anticompetitive environments with potentially negative effects on scientific research, product development, fair distribution and equitable access to the technology. Hence, a reasonable balance must be found between the stimulation of sustainable innovation and competition, the promotion of scientific research and protection through IPRs. To reconcile these factors, each new technology has led to judicial responses and even modifications to the law. We are on the verge of a technological revolution associated with quantum technologies, including quantum computing and quantum/artificial intelligence hybrids. Its complexity and global significance are creating challenges, which could not have been foreseen when the IP system was developed. This article utilizes the insights gained from qualitative and quantitative studies to (a) inquire which IPRs and related rights are currently directed to quantum computing and (b) examine whether the strategic use of overlapping IPRs might lead to innovation distortions such as excessive anticompetitive effects and underuse associated with property fragmentation. Emphasis is laid on the question if, and if so to what degree, IP portfolio approaches could result in inappropriate proliferations of exclusive rights, raise anticommons concerns and denote unwanted concentrations of first mover market power. It concludes by outlining potential proactive responses to mitigate these risks, while addressing the major future open and closed innovation opportunities, implications and challenges posed by quantum technology in general and quantum computing in particular. Current advances in quantum technology highlight the unique characteristics, promises and perils of quantum technologies—such as the unprecedented capabilities of quantum sensors, secured communications and the potential for quantum computing to solve problems beyond the reach of classical processors by implementing quantum algorithms on programmable quantum computers. The spectrum of potential applications is vast and ranges from uses in health and life sciences (eg, modelling chemical processes at the quantum using quantum simulation) to national security (eg, military uses quantum cryptography, communications and computation). In light of these actual and potential capabilities, national governments have invested over $25 billion into quantum computing research by mid-2021,1 and some reports announce that by September 2021, the quantum technology industry has attracted more than $1 billion in venture capital.2 This will have clear implications not only for the future of business, science, government and the global power game but also for society itself.3 While the predicted consequences of quantum technology remain in part speculative, it becomes increasingly evident that the ethico-legal frameworks for incentivizing, protecting, governing and regulating quantum technologies will have to be carefully studied. These frameworks might potentially have to be adapted—or newly interpreted—considering the new realities presented by second-generation (2G) quantum devices. International organizations, such as the World Economic Forum (WEF), have therefore engaged in developing ‘the first set of principles for responsible design and adoption of quantum computing technologies in order to incentivize the development of the technology while minimizing the possible risks’.4 Consequently, scrutinizing the existing framework for IPRs and how they apply to quantum computing, including their governance and regulatory dimensions, as well the interplay of IPRs with new forms of potentially closed or more decentralized and open innovation systems, are becoming ever more relevant. One of the primary goals of IPRs and related rights, such as patents, copyrights, trade secrets and trade marks, is to reward and protect creative and innovative efforts in order to promote scientific and technical progress, as well as stimulating fair competition through the distribution and commercialization of technologies.5 For example, an effective and predictable patent protection regime is generally regarded as necessary to encourage risky and costly research in complex technologies that take a long time to reach the market but are relatively easy to copy such as many pharmaceuticals. Other IPRs, such as trade secrets, could become more relevant regarding highly complex technologies that are not so easy to copy and face less regulatory barriers. However, overprotection through IPRs can also lead to a situation that would create a fundamentally anticompetitive environment.6 For example, a proliferation of patent rights upstream could potentially hinder essential innovations further downstream in the course of scientific research and product development because each upstream patent allows its owner to create another obstacle on the road to product development, adding to the cost and slowing the pace of downstream innovation.7 Dealing with this potential dilemma, commonly referred to as the ‘Tragedy of the Anticommons’, requires a reasonable balance to be found between the stimulation of innovation competition, the enhancement of scientific research and the careful protection of intellectual property rights.8 To maintain such a reasonable balance, each new technology has involved modifications to the law. This is nothing new. The first patents, during the Industrial Revolution, were mostly directed to mechanical devices and articles of manufacture. When chemical law the existing framework to solve new problems posed by and of based on and by the of and as well as in and have also led to many and a of law and We are currently on the verge of a new technological revolution associated with quantum technologies, including quantum its complexity might create challenges, which could have been foreseen when the system was this this article (a) which IPRs and rights would be to quantum technology and (b) an of whether the strategic use of of IP rights to the of a quantum IP portfolio potentially might lead to anticompetitive of market and competition and In this it would progress in an of quantum quantum will therefore be laid on the question if, and if so to what degree, overlapping IPRs could result in an inappropriate of global exclusive rights for first and in an unwanted of market power. To these this article will first with an of what quantum computing and how it can be will which of IP are at present the of quantum will these the first of on the patent for quantum will use the insights gained from qualitative and quantitative studies to the implications and possible responses to to mitigate and to future based on the of and Quantum computing its from principles of quantum (eg, and the of the Quantum the between and and the of at the beyond classical including such as and the of is the of the the of of such as of and Quantum and general are to be in an that the of at Quantum or are the quantum of can be a or a or a of We this with a a quantum in of possible quantum In to quantum can be while of each This is as quantum quantum to the in which a potential that is in For these are quantum In quantum computing is for some of the problems on which such as and for the of and Quantum are when modelling or of using quantum These at complex However, quantum also have For example, quantum can to complex and such as the but they to these The of artificial intelligence (eg, and quantum and can solve and chemical can problems that are currently not with the of classical computers. 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