Consumer Law Compliance A Governance Issue For Open And User Innovation

Since nowadays a significant number of consumers are involved in the innovation process, some crucial legal issues are arising from consumer law. Even a “pro-sumer”, who appears to be a paradigmatic player in the innovation process, is usually not “professional” in a way that precludes him from mandatory consumer protection. According to European consumer law, any natural person who is acting for purposes which are outside his trade, business, craft or profession should be deemed to be a “consumer”. In contrast anyone else who is acting for those purposes should be considered as a “trader”. So in the majority of cases the legal entity who runs an open and user innovation platform is a “trader”, while most of its members are consumers. Against this background this paper examines specific consumer law issues of open and user innovation. As open and user innovation is a multinational and cross-cultural phenomenon it is not limited to specific national jurisdiction. Hence, open innovation communities usually create their own set of social norms and legal rules governing access, membership and policy issues. In the light of European consumer law these communities run the risk of a (legally) void set of rules, because of a deficient level of consumer protection. Thus, the compliance with consumer law is not only a matter of good practice; in fact it is essential for the prosperity of innovation communities. This (working) paper is based on comparative and doctrinal legal research involving economic and management research on open and user innovation. It deals with different paradigms of consumer protection in EC law with special regard to open and user innovation. The main issue addressed in this paper is the influence of mandatory provisions regarding the competent jurisdiction, applicable law and consumer protection on the governance of open innovation communities. Preliminary findings show that there is need to encourage the implementation of a consumer law compliance system especially by open innovation communities to identify, correct and prevent breaches of the law.