Smart machines and the future of IP: What do I tell my grandchildren?

The question, as posed, is simple—how will IP practice fold into the future landscape of knowledge workers? The query arose while reading the Schumpeter column, entitled "The age of smart machines", here, that appeared in the 25 May issue of The Economist. In that column, The Economist considered how technology, in the form of smart machines, may be altering the value proposition offered by knowledge workers. The Holy Grail of knowledge, the more the better, was the ethos instilled within my generation growing up, especially from my boyhood perch in the U.S. Midwest in what has become called the "U.S. Rustbelt", as factory after factory has been shuttered and abandoned. We were hardly aware of the unique comparative advantage that the U.S. knowledge class enjoyed at that time, with rapid post-World War II redevelopment placing a premium on employing a smallish stock of educated males. As long we could use knowledge to place ourselves on the right side of the blue collar/white divide, our future seemed assured. The fate of knowledge workers seems less certain today.

Of particular interest in that regard are the comments offered in connection with the book, Race against the Machine, published by MIT Professors Erick Brynjolfson and Andrew McAfee in 2011. And so it is summarized:

"… [T]hey [Brynjolfson and McAfee] predict that many knowledge workers are in for a hard time. There is a good chance that technology may destroy more jobs than it creates. There is even greater chance that it will continue to widen inequalities. Technology is creating ever more markets in which innovators, investors and consumers—not workers—get the lion's share of the gains."

The column ends with the following warning:

"Knowledge-intensive industries will also have to rethink cherished practices. For a start, an age in which information and processing power are ubiquitous, they will have to become less like guilds, whose reflexes are to regulate supply and restrict competition, and ore like mass-market businesses, whose instinct is to maximize the customer base. Innovation will disrupt many areas of skilled work that have so far had it easy. But if we manage them well, smart machines will free us, not enslave us."

As IP professionals, what do we make of these observations? A few comments are in order.

1. We have witnessed the outsourcing of certain tasks to lower-cost environments such as India, where patent searching, patent analytics and even patent drafting enterprises are flourishing. But these developments are more the result of globalization than the rise of the smart machine. Roughly speaking, whether these tasks are being carried out in London, San Francisco or Bangalore, there is still a flesh-and-blood knowledge person is was doing at least a material part of the work. What happens when smart machines are increasingly integrated into the mix?

2. At least with respect to patent searching and analytics, two possibilities are suggested. Either the rise of the smart machine (and the growth of cloud computing) will in part neutralize the manpower cost advantage that has driven the growth of outsourcing, in which case more and more of these activities will migrate back to the developed world, or it will not. Something like this is reported to be happening in the manufacturing sphere, where some manufacturing is returning to North America from parts of Asia. Could something similar occur with respect to patent searching and analytics?

3. Patent drafting suggests a somewhat different dynamic. Here, a further comment in the column, based on research by the McKinsey Global Institute, is instructive: 

"…[B]eing spared relatively undemanding tasks will free knowledge workers to deal with more complex ones, making them more productive." 

This Kat wonders whether this will apply to patent drafting. As argued above, the outsourcing of patent drafting has been a function of globalization and the cost benefits derived from manpower resources and related inputs. This Kat does not have a good sense to what extent outsourcing is also a function of the complexity of the invention involved. Whatever the answer to that question, it still remains an open matter how the smart machine will alter the current outsourcing dynamics regarding the labor-intensive task of patent drafting.

4. For instance, will it narrow the gap that sometimes exists in language skills and direct access to the inventor(s), to the benefit of the lower cost drafting purveyors? Or will the complexity of the invention, whatever the extent to which smart machines will mechanize our lives, still confer a drafting advantage to the onshore country? Will it create a further skewed allocation, with an even smaller number of particularly complex, expensive applications remaining onshore, with all the rest outsourced? Or will there be a middle range of inventions that will be shared both onshore and outsourced, depending upon on the particular circumstances?

5. In that connection, there is also matter of the patent bar as a guild. There is a hydra-like aspect to a guild. On the one hand, it has a negative connotation, as suggested by the column, due to its restrictive and regulatory nature. On the other hand, the guild can provide the framework for assuring quality control (consider the multi-century line from the Germanic guild to the present-day German apprenticeship system). Will the smart machine lead to a change in the guild-like nature of the patent bar and, if it does, will the overall impact be positive or deleterious to the service providers and consumers of patent services?

This Kat's grandchildren (armed with their smartphones, of course) are reaching the age where they are about to ask their grandfather what he does and whether they might be interested in following in his footsteps. I wonder what I will be telling them about the future countenance of the IP profession and, especially, of patent practice.

More on the Rustbelt here.