How a flexible and creative approach to intellectual property can help an organization accomplish goals ranging from building market share to expanding an industry.

Most managers leave intellectual property issues to the legal department, unaware that an organization's intellectual property can help accomplish a range of management goals, from accessing new markets to improving existing products to generating new revenue streams. In this book, intellectual property expert and Harvard Law School professor John Palfrey offers a short briefing on intellectual property strategy for corporate managers and nonprofit administrators. Palfrey argues for strategies that go beyond the traditional highly restrictive “sword and shield” approach, suggesting that flexibility and creativity are essential to a profitable long-term intellectual property strategy—especially in an era of changing attitudes about media.

Intellectual property, writes Palfrey, should be considered a key strategic asset class. Almost every organization has an intellectual property portfolio of some value and therefore the need for an intellectual property strategy. A brand, for example, is an important form of intellectual property, as is any information managed and produced by an organization. Palfrey identifies the essential areas of intellectual property—patent, copyright, trademark, and trade secret—and describes strategic approaches to each in a variety of organizational contexts, based on four basic steps.

The most innovative organizations employ multiple intellectual property approaches, depending on the situation, asking hard, context-specific questions. By doing so, they achieve both short- and long-term benefits while positioning themselves for success in the global information economy.

In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures.

Background

Organizations in knowledge-intensive industries such as the field of PharmaNutrition benefit from a critical consideration of intangible resources for innovation performance and competitive advantage. Effective management of these resources, however, is complicated due to difficulties in their identification, appropriation, application, and evaluation. As a consequence, knowledge-intensive organizations are at risk of suboptimal exploitation of their most important value drivers.

Methods

The literature on organizational intangible resources was reviewed as part of an ongoing investigation into effective management of intangible resources in the PharmaNutrition-specific context.

Results

Although high-level dimensions of intangible resources are recognized across industries, the identity and relevance of various lower-level components are heterogenous and dependent on organization’s unique situational attributes. Despite the existence of historical, industry-sourced tick-the-box lists presented here, an analysis of industry-specific characteristics of intangible resources and mechanisms to appropriate their value is warranted to enable practitioners to innovate effectively and efficiently.

How to profit from innovation has been an important question for both innovation scholars and practitioners over the years. It is certainly a relevant question for all types of technological innovation, including emerging ones. Teece's (1986) profiting from innovation (PFI) framework sets forth a theory of the relevant contingencies. However, Teece's framework focuses on technologies with applications in specific domains. We focus on the question of how to profit from enabling technologies: technologies that are applicable across multiple domains. We argue that capturing value in such circumstances is fundamentally different from profiting from less-enabling technologies and raises new issues with respect to the relevant business models and public policies. This paper's contribution is threefold. It formally revises and extends the original PFI framework to include the case of enabling technologies; it provides empirical evidence to support the distinction between profiting from enabling as compared to profiting from narrower "discrete" technologies; and it generates perspectives on the appropriate business models for these technologies and discusses related public-policy implications, in light of the fact that the share of the benefits the innovator can capture is likely to be even smaller for enabling than for discrete technologies.

From the EU IPR Helpdesk

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The MIPLM Industry Case Study Series is aimed at documenting European best practice in IP management in different industries and companies of various sizes.

The CEIPI Master's program in Intellectual Property Law and Management (MIPLM) has been honing the IP management skills of IP experts since 2006. The program teaches strategy development for IP organization and implementation of IP strategies, integration of IP in corporate innovation management, IP-based business development, as well as leadership skills.

The MIPLM IP management case studies from the Industry Series provide practical insights into these topics, covering specific cases in real companies. The co-authors are top managers of these companies and vouch for the authenticity of the reported cases with their names.