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Valuable technological knowledge attracts more imitations. In light of knowledge-level perspective, this study investigates how firms could generate rare and valuable knowledge that is also hard to imitate. By applying specialised complementary assets concept to the technological portfolio of a firm, we show that core and background technological knowledge from internal and external sources, respectively, are complementarily combined to create new technologies that delay inter-firm knowledge externalities and that generate significant intra-firm knowledge flows simultaneously. The results suggest that the combination of knowledge in certain technological categories would have significant appropriability benefits, allowing firms to generate valuable and hard to imitate technological knowledge. This finding contributes to knowledge management, patent economics, and appropriability literature. Managerial implications for knowledge management are also discussed.

Expropriability is the ability of (potential) competitors to extract information about innovation and utilize it to their advantage in a manner that decreases the competitive advantages of the original innovator. It has an effect on the profit margins and, subsequently, on the strategic behavior of a firm in terms of innovation activities. In this study, the relationship of appropriability and expropriability is clarified, and empirical evidence from 299 companies is provided to increase understanding of the strategic protection of intellectual assets. The results indicate that industries differ in terms of expropriability and that innovation performance depends on the level of expropriability.

Innovations have the potential to create value by generating rents (primary appropriability), or they can be used as background knowledge for further innovations and value creation (generative appropriability). Because these possibilities exist, organisations need to make strategic decisions on knowledge sharing with their partners in collaborative innovation. In best cases, primary and generative appropriability are complementarities rather than alternatives: Knowledge sharing with partners for new innovation could be made safer using formal and informal isolating appropriability mechanisms that improve controllability, thereby preserving rent generation possibilities and simultaneously allowing safe knowledge exchange. We use a quantitative sample of 209 Finnish firms to examine how different formal and informal appropriability mechanisms relate to value capture and creation, and whether these relationships are affected by the strategic goal to reduce imitation of competitors or to improve safe knowledge sharing to partners.

Maintaining innovation potential means that ideas, and the people generating those ideas, should be at the firms disposal. Furthermore, the firm should be able to capture value from people's ideas. Losing these people therefore poses risks. Managing these risks is challenging, especially without intra-firm consensus on their role. This study examines how and why perceptions of severity and management of risks related to knowledge leaving and knowledge leaking differ across organisational levels and different firm locations. Depending on what types of differences are present, and why similarities and differences emerge, managers can direct their attention to different control or commitment-enhancing practices to address the risk of harmful knowledge loss and imitation. They should do this in a manner that enables them to maintain the prerequisites for future innovation and a creative work environment, while at the same time allowing global coordination and local adaptation.

This study investigates the role of formal and informal appropriability mechanisms to appropriate revenues from innovation in several sectors. This relationship depends on factors such as sector, type of product or service, firm’s characteristics, etc. The set of appropriability mechanisms used by a firm depends on their availability and on the firm’s appropriability strategy. An empirical test using a sample of 2,122 Portuguese SMEs from four different sectors of the 2012 Community Innovation Survey indicated that for manufacturing; water supply, sewerage, waste management and remediation activities; and wholesale and retail trade, repair of motor vehicles and motorcycles; informal appropriability mechanisms, such as lead-time and complexity, are more effective for converting product innovation into financial performance in the short term. On its turn, for extractive sectors (Mining and Quarrying), formal mechanisms (e.g., patents) are better to protect product innovation and informal mechanisms are more effective to protect process innovation.

Firms who want to appropriate innovation often need to make decision facing the trade-off between patenting and secret. This paper explores how leading firms make trade-off between patenting and secret through the view of the interaction between leading firms and following firms who have the option of imitation or substitution, based on the evolutionary game theory. Then, a simulation model is built combining the evolutionary game model and agent-based modelling method, which allows us to implement bounded rationality and interactivities. The simulation is run with different gain parameters and the results are checked by cross-validation. It is found that leading firms are more likely to adopt patenting strategy with well developed patent protection regime. While depending on variations on patent protection effectiveness, technological characteristics, and leading firms’ investment in patent portfolio development, following firms may choose imitation strategy or substitution strategy. Considering bounded rationality, firms could choose sub-optional strategies and leads to scenarios other than evolutionary equilibrium solutions, which provide deeper insights of strategic choices of leading firms and following firms. This paper makes contributions to theory by using the perspective of multi-agent view and integrating bounded rationality in the simulation. Finally, this paper draws conclusion and puts forward some suggestions.

Changes such as expiring patents and shifting environments challenge a firm trying to reach long-lasting appropriation success of an innovation. To understand how appropriation can be continued over time, this study investigates and compares Bayer’s two innovations, Aspirin medicine and Roundup herbicide. Whereas for the first, appropriation success has been continued through decades, for the latter, such a continuum has not realised. Our findings suggest that long-lasting appropriation success lies in adjusting the appropriation strategy by identifying the most substantial appropriability premises for innovation (appropriability mechanisms and complementary assets) and the ways to use them in different situations, paying specific attention to the shifting appropriability conditions. For long-term success, it is critical for firms to recognise that isolating appropriability mechanisms and complementary assets can have varied and distinctive implications depending on the pertinent contextual factors at innovation level and to strategise accordingly.

According to the literature on appropriation, firms patent mainly to prevent copy. However, given that innovation and patents form part of firms’ broader competitive strategies, patenting can include many other objectives such as blocking, increasing prestige and improving bargaining power, among others. The evidence about this kind of strategic and competitive use of patents is extensive for developed countries but almost null for developing countries. This paper aims to contribute to filling this gap in two ways: firstly, by analysing Argentine firms’ motivations for patenting and, secondly, by exploring the determinants of such motivations. The data used comes from the most recent Argentine innovation survey (ENDEI II), which provides information on around 300 manufacturing firms that applied for patents between 2014 and 2016. The findings show that Argentine firms follow one of two composite patenting strategies, the most common one being guided by objectives related to protection, including different types of blocking, and the other being guided by the less technological goals identified by the literature on strategic patenting, such as prestige, bargaining and licences.

This paper focuses on conflicts of interest faced by technology-based firms which are embedded in an industry network. In the industry situation analysed here, issues have arisen as to how they can innovate effectively when judged from the perspective of their network partners while achieving their own internal objectives of growth and enhancement of innovative capability. The conceptual conclusions derived from the study are assessed for their generalisability to the global context of the oil industry, and to other industries in the United Kingdom (UK) and elsewhere. It is concluded that where a perceived conflict of interest arises in sharing leading edge technology, firms act in ways which are detrmental to the industrial network as a whole and, ultimately, to the technology leader firm itself. In order to maximise the returns to the technology-based firm, it must (i) select the group of clients/suppliers and portfolio of projects which offer the best spectrum of complementary resources in the light of its growth strategy; and (ii) structure its set of relationships to minimise the perceived risk to its competitive position. Thus, it must identify how to select, win and manage a portfolio of appropriately worded contracts, which collectively minimise its own and its multiple partners' conflicts of interest while ensuring that the required complementary resources will be forthcoming for current and future projects.

We know that firms use multiple appropriability means: intellectual property rights (IPRs), trade secrecy, market lead-time, and this varies significantly between industry sectors. We, however, do not know how and to what extent the appropriability regime are modified in response to digitalization and open innovation. This study aims to fill in that gap, through a study of the Swedish games industry. Applying a well-established framework — Profiting from Innovation — to the digital context, this study collects primary data from semi-structured (firm) interviews, a survey and combining the statistical data from the branch organization and from EUIPO trademark database. It has been identified that: (a) this is an industry re-entering into a fluid phase of innovation with a rapid growth of products and (small) firms; (b) the value chains are transforming into value networks and the complementary assets are to be reassessed; and (c) trademarks are gaining importance and a Demsetz-ian path of internalization of IPs is pursued. Digitalization re-defines the key pillars of the PFI framework in many respects.

This article examines how patent protection in developing countries affects the technology licensing strategy of US multinational firms and the associated technology transfer flows. Strengthening patent rights lowers appropriability hazards and so reduces the firms’ reliance on affiliated licensing as the more secure means of transfer (the internalization effect). However lower appropriability hazards also encourage the firms to increase the volume of technology transfer via licensing both within and outside the firm (the appropriability effect). Which effect prevails depends on the underlying technological complexity of the firms’ product. We find that a strengthening of patent protection in the host country increases the incentive to license innovations to unaffiliated parties. While unaffiliated licensing rises among all firms, the volume of affiliated licensing falls among complex-technology firms but rises among simple-technology firms. The positive appropriability effect on affiliated licensing is strong enough among simple-technology firms that the entire composition of their licensing further shifts towards affiliated parties. The results are significant for recent work on the internalization theories of multinational firms and the interaction between firm strategy and the institutional environment, as well as for patent policy in the developing world, where access to knowledge is critical.