2.10
Commercializing IPRs and Corporate Knowledge
Motives for protecting IP
Growth & Development
Reputation & Brand
Market Value
Deterrent Against Infringement
whatever the size of the firm, developing an IP portfolio, can help attract finance and further funding for investment.
An IP portfolio can develop the reputation and brand of firms, leading to enhanced market value
An enhanced reputation can sometimes enable firms to price according to the enhanced brand value of their organisation.
Market value also enhanced the firm’s reputation particularly if market value increases year on year, which can lead to positive publicity
IP ownership provide a legal basis to stop infringement by clearly establishing proprietary rights.
IP ownership secures rights to inventions developed through R&D investment and provides a deterrent to rival firms from exploiting their economic value
IP ownership can block the R&D and technological development of competitors.
Strategies for commercialisation
Strategic patenting
Motives for Protecting Patents
Traditional Motives
Strategic Motives
to protect the IP owner’s inventions from imitation and to safeguard national and international markets.
arises when patenting achieves broader strategic objectives to enhance the IP owner’s competitive advantage.
Strategic patent strategies focus less on the individual patent and more on the overall patent portfolio.
Strategic motivations can become the primary reason behind firms’ patenting behaviour
three key strategic patent motives:
Blocking motives
Reputation motives
Exchange motives
to block competitors from patenting. Blocking motives can be defensive and offensive.
firms are racing to invent and secure first to file advantage in the patent process.
Firms pursuing blocking motives can develop a portfolio of overlapping and intersecting patents that fence-in technologies and impede the ability of rivals to use, build-on or invent around new inventions. This gives rise to the term patent fencing.
Developing state of the art technologies can significantly enhance a firm’s reputation and image
Patents can provide innovative firms with leverage and improve their position in contract negotiations and collaborations.
IP owners with limited resources or seeking to secure finance can pursue a patent strategy to improve access to capital markets, contract exchange potential and license income.
Firms pursuing a strategy of collaboration and open innovation can develop patent pools, which are arrangements among three or more entities that agree to cross-license patents.
Patent Thicket
When multiple firms are competing and developing numerous intersecting and overlapping patents to block each other from commercializing or further developing their patents
This might impede innovation and result in underusing these patents
Patent collaborations and patent pools can be a means to overcome patent thickets.
Strategies of non-practicing entities (NPEs) or patent assertion entities (PAEs).
Patent trolls
In August 2021, Apple was ordered to pay US$300 million to patent troll Optis
Commercialisation is the conversion of an intangible asset into a product or service of value, for which customers will pay, providing revenue for the firm
the choice of how to commercialise will depend on various factors. These include:
firm size
resources
strategic direction of the firm
competition levels
growth potential of the market.
strategies for commercialisation
Sale
Donation
Acquisition (take-over)
Licensing (licensing-out and licensing-in)
Cross-licensing
FRAND Licensing
Fair, Reasonable and Non-Discriminatory (FRAND)
The IP owner can sell rights to a patent, design, trademark or copyright
appropriate for a small firm that does not have the resources to exploit the technology
Or appropriate for a firm that has developed IP accidentally and the technology does not fit the firm’s core competencies
IP owners can donate their IPRs without seeking any value in return.
In 2019, Tesla released its electric car patent technology in the spirit of open innovation
Acquiring another organisation can broaden a firm’s IP portfolio
A license is a contract involving a transfer of technology or know-how in return for value
A license is a permission given by the IP owner (licensor) to another party (licensee) to use IP rights in exchange for an agreed payment (usually a fee or royalty).
most common types:
Technology Licensing Agrement
Copyright Licensing Agreement
Trademark Licensing Agreement
When two firms license technology from each other.
Cross licensing is a good example of open innovation and collaborative working, enabling the firms to compete with rival telecoms firm Apple.
Endorsed licence of right
Franchising
an agreement which gives a permission, typically to use a business model in accordance with terms stipulated by the franchisor to a franchisee.
Securing value from IP
Contract of sale
the IP owner can secure a lump sum or scheduled payment from a buyer who acquires rights to the IP.
Securing value from licensing