Exploiting Intellectual Property to Promote Innovation and Create Value

The following sections are included:

• Contents

There are two traditional narrow views of the role of intellectual property (IP) within the field of innovation management: in innovation management research, as an indicator or proxy for innovation inputs or outputs, e.g. patents or licensing income; or in innovation management practice, as a means of protecting knowledge. In this book, we argue that whilst both of these perspectives are useful, neither capture the full potential contribution of intellectual property in innovation management research and practice. The management of IP has become a central challenge in current strategies of Open Innovation and Business Model Innovation, but there is relatively little empirical work available (Tidd and Bessant, 2017)…

Firms in open source software (OSS) are active in a field encompassing all the characteristics of a public good, given the non-excludability and non-rivalry nature of OSS. The fact that many important inputs to the innovative process are public should not be taken to mean that innovators are prevented from capturing private returns. The objective of this paper is to explore how firms appropriate returns from innovations that are created outside the boundaries of firms and in the public domain, using the case of OSS. To do so, the paper draws upon an explorative multiple case study of five small firms that attempt to appropriate returns from OSS, with rich empirical evidence from various data sources. The cases illustrate how firms try a variety of approaches to appropriate adequate returns, and suggest that selling services is the dominant trend. Firms also balance the relative inefficiency of traditional means of intellectual property rights such as patents by putting greater emphasis on first-mover advantages and creating network externalities.

This paper identifies differences in institutional contexts (legislation) between Sweden and the UK and their effects on technology transfer policies. It then proceeds to examine how such activities are organized by universities. Empirical evidence from surveys conducted with technology transfer managers at eight Swedish universities and eleven UK universities gathered in Sweden and the UK during 2004 is analyzed. It is argued that the historical developments of these systems depend on different institutional contexts, which influence the modes of organization. The UK technology transfer system is based on similar legislation to that of the US, with IPRs being granted to the universities. The Swedish system, however, grants IPRs to the individual researchers, though with some new features —such as science parks and incubators — suggesting a change towards greater agent (university) involvement in encouraging technology transfer. This change indicates a breakthrough for the “entrepreneurial university” in Sweden.

The emergence of open innovation theory and practice, alongside the evolution to a quadruple helix system of innovation, has led to a need for universities to rethink their models of engagement with industry and wider society. One important element in this system is the entrepreneurial academics; however, there is a lack of research considering the motivations of entrepreneurial academics, who differ from academic entrepreneurs, to engage in knowledge transfer in line with open innovation policy. This research offers practical insights on whether new models of engagement, increasingly offered by universities, really address the policy drivers for open innovation. Furthermore, this research explores whether these activities might motivate entrepreneurial academics to participate. Preliminary findings identify that many supposedly new collaboration activities do not really motivate entrepreneurial academics. This may have important implications on the ability of universities to become truly open and to encourage their academics to become engaged in collaboration and impact.

The following sections are included:

• Introduction
• The Legal Status of New Use Patents
• The US Pharmaceutical Industry’s R&D and Regulatory Approval Process
• Technology Strategy: The Repurposing Approach
• Discussion and Recommendations for Future Research
• References

Most of the literature on intellectual property protection focuses on patenting and neglects alternatives, such as registered designs and copyrights. The literature that includes these alternatives generally treats them as nominal alternatives, and ignores the fact that copyrights are cheaper and easier to obtain than patents or registered designs, which would make it more sensible to treat them as ordinal. However, this ordinal behaviour could not be confirmed on the Dutch 2006 Community Innovation Survey dataset. Treating our protection variable as multinomial confirmed the influences on patenting found in the literature, but showed registered designs and copyrights to behave differently.

An important aspect of strategic choice is whether to pioneer or to imitate, that is, whether to be a first-mover or a follower. It has been suggested that this is particularly important for small and medium-size enterprises (SMEs) because of potential disadvantages of scale in design, production and marketing. However, empirical evidence suggests that many SMEs can be successful first-movers and that pioneering strategies enable them to compete against larger firms that have scale advantages and possess important downstream resources. This paper looks at the issue of timing of entry from a different perspective. It is concerned with the role of imitation as a strategy and its success when smaller firms are in competition with larger firms. Acquisition of technology through licensing is a frequently used strategy for firms of all sizes. It is also a classic ‘imitation’ strategy. The paper reports a study of imitative behaviour in a sample of UK manufacturing firms of varying sizes. A comparison of strategic motives, capabilities and outcomes is examined in the context of technology strategies involving both in-house R&D and that acquired through inward technology licensing. An important distinction is made between licensing that provides a basis for subsequent innovation and licensing for reactive imitative purposes. The study concludes that imitation is a viable policy option for smaller firms, but that complementary assets and appropriate capabilities determine whether such a policy has a major competitive impact or is merely a reaction to unsuccessful in-house innovation. The study calls into question the use of size per se as a competitive indicator, and indicates reasons underpinning imitative behaviour that may influence downstream success.

The focus of this article is on exploring the business competitive consequences of firm patent strategies in the United States de jure technology standard development processes. An analytic framework (“Firm Patent Strategies Matrix”) is created which formally identifies a set of firm patent strategies applicable in the de jure technology standard development process. This Firm Patent Strategies Matrix is predicated on two key variables relevant to the standard development process: first, firms are either active participants in standard-setting committees, or they are non-participants, and second, firms are either disclosing appropriate information on potentially relevant patented technology (or patent pending applications on such technology), or they are not disclosing such potentially relevant patented information on technology (or patent pending applications on such technology), in the standard development process. The Firm Patent Strategies Matrix identifies the following four generic strategic choices for a technology-driven firm to choose among concerning the disposition of its patents: (1) Disclosure/Participation, (2) Disclosure/Non-Participation, (3) Non-Disclosure/Participation, and (4) Non-Disclosure/ Non-Participation. Public policy issues, relevant to these Firm Patent Strategies, are identified (e.g., RAND licencing terms, patent ambush and submarine patents) and recommended policy solutions are offered (e.g., instituting Ex Ante royalty discussions, vigorous federal antitrust enforcement against patent ambush and the wider use of firm patent liability insurance, respectively).

The knowledge protection/sharing dilemma related to innovation activities is becoming known to all firms, even though it is generally more notable for SMEs: the small size of the firms inherently creates a need for inter-organizational collaboration, but it also makes dealing with the related contradictories more challenging. One factor behind this is that the needed tools — such as the protection mechanisms of intellectual assets — may be more limited. In line with this notion, we examine the protection available for and used by small firms in their innovation activities. We approach the issue by conducting a review on the relevant literature, and use a qualitative multiple case study conducted in eight small companies to empirically study the issue. Departing from prior research, we consider protection of innovations by distinguishing between the intangibles needed in innovation activities and the actual innovation outputs, and combine these considerations to the knowledge protection/sharing dilemma.

The purpose of the paper is to empirically study firms’ practises of knowledge and intellectual property (IP) management in customer–supplier relationships. The work applies the qualitative methodology of multiple case studies, and the material was collected in semi-structured interviews with management personnel at 36 organisations in Finland and in the Netherlands. Almost every firm had innovation relationships with their customers and suppliers, but the forms these relationships took, and the kinds of practices they involved, varied greatly. As a result, the firms considered the management of knowledge and IP in these relationships very challenging. We argue that by distinguishing knowledge management in the exploration phase of new business from knowledge management in the exploitation phase of innovation outcome, the firms could manage the knowledge and IP better. Accordingly, the paper introduces three propositions to support the knowledge and IP management in customer–supplier relationships.

The general objective of this study is to investigate the erectile dysfunction pharmaceutical market over the past two decades (1990–2010) through patent data analysis. The study of the erectile dysfunction market allows the analysis of the technological trajectory of Viagra^® in its several phases, since the launching of a radical innovation, going through the accommodation of incremental innovations and eventually the release of generic versions of that product. This is a descriptive, documentary, longitudinal research that analyses five research hypotheses. The results show how the erectile dysfunction market has developed over the years and the lessons that can be extracted regarding Intellectual Property Rights for countries, companies and governments, including political and social considerations about how much should a patent protect innovation.

This research paper examines the relationship between intellectual capital, product innovation and performance based on a study of Austrian firms covering a 10-year period. It is argued that intellectual capital enhances a firms ability to successfully realise innovations and thus contributes positively to its performance. Our study found that human capital and structural capital were both significantly associated with performance in product innovating firms, but that each had a different impact on this performance. While human capital had a positive impact on profitability and growth in the long run, contrary to expectations, structural capital had a negative effect on profitability and growth indicating that apparent strength can turn into a weakness over time. In addition, the study found that human capital and structural capital had no joint effect on the performance of product innovating firms.

How should intellectual property (IP) be protected and appropriated to gain value for the firm? This study aims to answer this question by examining the impact of the key determinants of IP appropriability, namely organizational resources, IP management practices and organizational learning culture, on innovation performance. The study uses quantitative survey data obtained from the Australian biotechnology, pharmaceutical and ICT industries in order to test several hypotheses. Our results show that exploitation and protection of IP within an organisational learning culture have a significant effect on the firm’s innovation performance. The implication for managers is that IP appropriation is likely to be most successful when trade secrets and profits from innovation are applied simultaneously within an organizational learning culture.

In this paper, I examine the role of patent stock, citation stock and objection stock in the analysis of R&D productivity and the exact interrelationships between those stocks by using new data on 100 large Japanese companies. I find, first, that citation and objection stock represent the knowledge stock of the company well, whereas patent stock itself is an ineffective proxy for the knowledge stock. Objection stock seems to be the best proxy for the knowledge stock. Second, citation and objection stocks are effective in playing the role of control factors for successful R&D stock, whereas patent stock is only effective if lags in R&D stock are incorporated. Third, citation and objection stocks are good proxies for controlling for the quality of patent stock. Citation stock seems to be the best variable for controlling for R&D stock and patent stock.

This study investigates the relationship between the subsidiary’s external knowledge sourcing in the host network of operation and innovative performance, and the moderating role of (i) alternative sources of knowledge (those related to the internal and external home knowledge network) and (ii) Intellectual Property Rights (IPRs) distance between the host and the home location of the Multinational Enterprise (MNE). Based on a dataset comprising 170 R&D subsidiaries (classified by 57 parent companies and 23 host countries) it is shown that a curvilinear (inverted U-shaped) relationship exists between external host knowledge sourcing and innovative performance. In terms of the moderating effects, the findings reveal that the influence of alternative sources of knowledge affects the aforementioned relationship in a negative way. Finally, a stronger IPR protection regime in the host location weakens, rather than strengthens the relationship between the external host knowledge sourcing and innovative performance.

Patent aggregating companies are institutions that aggregate patents for different purposes. From a managerial perspective as well as a theoretical perspective, it is interesting to understand what value such novel business models provide to inventing companies. In this paper we focus on the question how patent holders can use patent aggregating companies as means to capture value from their inventions. Therefore the business models of patent aggregating companies need to be understood. Existing literature lacks a systematic and comprehensive analysis of the patent aggregating companies’ business models. The empirical data presented and discussed in this article was collected over a five-year (2009–2014) period in semi-structured interviews with patent aggregating companies’ incorporating personnel and in an extensive analysis of secondary data. We conclude our study by identifying four groups of patent aggregating companies based on the values provided to the original patent holders: the guarders, the shielders, the funders and the earners.