The Role of Patent Law in Knowledge Codification

Recent studies of knowledge production have increasingly recognized the role of codified knowledge in the operation of social organizations. Much of the knowledge resident in organizations exists as tacit knowledge, that is, as knowledge that goes unrecorded.Typically such knowledge is carried as the personal expertise of employees, passed along to other employees if at all either orally or by practice convention. Such knowledge is frequently a major asset of the organization, and is often critical to the organizations continued operations. However, individualized tacit knowledge is at continual risk: the death or departure or disaffection of key personnel can deprive the organization of the asset, placing the continued operation of the organization in jeopardy.Organizations can guard against such risks by attempting to codify tacit knowledge, that is, by reducing tacit knowledge to a stable coded form that exists independently of individual personnel. Codification of knowledge not only facilitates transmission and retention of knowledge within an organization, it also facilitates barter and exchange of information between organizations of knowledge, effectively sustaining knowledge commodification. However, codification is costly as it requires the development and transmission of codes, as well as supporting processes of recordation and the preservation of coded materials. Additionally, the use of codes implies the existence of sufficient tacit knowledge for users to understand and employ the codes. Thus, while codification may alter the measure of tacit knowledge, codification is never complete, and some equilibrium between tacit and codified knowledge is always maintained.The literature on knowledge production has to date recognized only in passing the role of intellectual property in this process. This paper applies the insights of knowledge production to the features of intellectual property regimes, both to flesh out the analysis of tacit knowledge codification, and to illuminate the role of intellectual property in the firm. Patents, for example, constitute an explicitly codified form of technical knowledge, providing a stable common code for technical know-how, partially ameliorating the risks associated with loss of tacit knowledge. Thus, aside from the usual justifications for patents in terms of incentive or disclosure, patenting may help to secure knowledge against loss or dissipation. However, considerable technical know-how will always remain in tacit form, unpatented and uncodified. As with all codes, the use of patents assumes an attendant constellation of tacit knowledge regarding the interpretation and application of the information in the patent. The degree of codification equilibrium between patents and tacit know-how has clear implications for integral components of entrepreneurship including employee mobility, outsourcing, strategic alliances, and other aspects of firm operations. Patents provide a common code for evaluation of inventions, creating a communicative standard for negotiation between firms. Codification through the patent system also provides important stability to attendant tacit knowledge. Patent doctrines regarding prior art, interference practice, and infringement all address the balance of tacit and codified knowledge. By functioning as a codification mechanism, patents may facilitate employee movement and entrepreneurial business spin-offs. Any alteration to the system of patent procurement and enforcement must take such effects into account.