factors affecting intellectual property strategy in sme's
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04/28/2023 1
Factors affecting Intellectual Property Strategies in SME’s
By Aditya KochharM.Sc. In Innovative Technology
Msc in Innovative Technology Engineering,
04/28/2023 2
• To understand various factors that affect the development of intellectual property strategies with reference to SME’s.
Objective
Msc in Innovative Technology Engineering,
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• Teece, D.J. “Capturing Value from Technological Innovation: Integration, Strategic Partnering, and Licensing Decisions” Interfaces, Vol. 18, No. 3. (1988), pp. 46-61.
• Thomä, J. and K. Bizer "To protect or not to protect? Modes of appropriability in the small enterprise sector." Research Policy(2012), http://dx.doi.org.ezproxy.wit.ie:2048/10.1016/j.respol.2012.04.019.
Papers researched
Msc in Innovative Technology Engineering,
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• Introduction
• Paper 1 – Fundamental building blocks of rent distribution that play key role
in defining intellectual property strategies.
• Paper 2- Empirical analysis of factors within one of the blocks in an SME
environment.
• Combining Paper 1 and Paper 2
• Conclusions
Overview
Msc in Innovative Technology Engineering,
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• Intellectual Property Strategy is an important aspect of today’s business.
• Small to Medium Enterprises are a backbone of a nation's economy.
• The factors affecting intellectual property strategy are constantly evolving with time.
Introduction
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Paper 1“Myriads of would-be
innovators have discovered that technical success is
necessary but not sufficient for establishing economic
utility and commercial acceptance.” – David J. Teece
Msc in Innovative Technology Engineering,
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Economic rents are always shared.
Msc in Innovative Technology Engineering,
Customers
Suppliers
Innovators
Imitators
Benefits from Innovation
• Economic Rents/ Profits/Benefits of Innovation are always shared.
• A large part of the benefits of the innovation are distributed amongst Customers, suppliers and imitators
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Examples of success and failure.
Msc in Innovative Technology Engineering,
•Pilkington (Float Glass)•G.D. Searle (NutraSweet)•Dupont (Teflon)
•IBM (Personal Computer)•Matsushita (VHS Video Recorders)•Seiko (Quartz Watch)
•RC Cola (diet cola)•EMI (scanner)•Bowmar(pocket calculator)
•Kodak (instant photography)•Northrup (F20)•DEC (personal computer)
Innovator Imitator
Win
Lose
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The fundamental building blocks.
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•Appropriability Regime
•Complimentary Assets
•Dominant Design Paradigm
Capturing the Rent Stream from Innovation:
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Appropriability regime
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• Strong
• Weak
Modes of Appropriability (examples)
Patents
Trade Secrets
Copyrights
Trademark
Lead Time Advantage
Secrecy
Complexity of Design
*efficacyNature of technology
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Dominant design paradigm
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*Thomas Kuhn (1970)
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Complementary assets
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Types of complementary assets
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• Generic
• Specialized
• Co-Specialized
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Channel selection for complementary assets
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• Contractual Mode
• Integration Mode
• Mixed Mode
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Interpretations
Open for improvements.
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Distribution of economic rents: 1 of 3
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Post ParadigmaticPre Paradigmatic
Wea
k Ap
prop
riabi
lity
Stro
ng A
ppro
pria
bilit
yGeneric complementary assets dominant
Innovators
Imitators
Innovators
Distributed
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Distribution of economic rents: 2 of 3
Msc in Innovative Technology Engineering
Post ParadigmaticPre Paradigmatic
Wea
k Ap
prop
riabi
lity
Stro
ng A
ppro
pria
bilit
ySpecialized Complementary Assets Dominant
Innovators & Suppliers
Imitators & Suppliers
Suppliers
Distributed
*Integrate
*Godfrey Houndsfield with EMI Scanner
04/28/2023 Msc in Innovative Technology Engineering, W20056967
18
Distribution of economic rents: 3 of 3
Post ParadigmaticPre Paradigmatic
Wea
k Ap
prop
riabi
lity
Stro
ng A
ppro
pria
bilit
yCo-Specialized complementary assets dominant
Innovators & Suppliers
Imitators & Suppliers
Innovators & Suppliers
Distributed
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The Link between paper 1 and paper 2
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•Appropriability Regime
•Complimentary Assets
•Dominant Design Paradigm
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Paper 2“Small companies adopt IPR's only
under highly selective circumstances.” – Thoma and Bizer
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The survey of German SME’s
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Cluster 1 Cluster 2 Cluster 3 Cluster 4Secrecy Patent Trademark No Usage of
protection Mechanisms
Complexity of Design
Utility Model Copyright
Lead Time Advantage
Trademark Secrecy
Secrecy Complexity of Design
Lead Time Advantage
Lead Time Advantage
Survey of 1251 German SME’s to identify their intellectual property management strategies
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Percentage distribution
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Percentage per cluster
Secrecy, complexity ofdesign, lead timePatent, utility model,trademark, secrecy,lead timeTrademark, copyright,secrecy, complexity ofdesign, lead timeNo usage of innovationprotection mechanisms
64%
19%
11%
6%
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Environmental factors
Msc in Innovative Technology Engineering,
Factors Cluster 1 Cluster 2 Cluster 3 Cluster 4Industry Sector Knowledge-
intensive manufacturing and service firms
Knowledge-intensive manufacturing firms
Well represented in all sectors apart from non-knowledge intensive services
Non-knowledge intensive manufacturing and service firms
Geographical markets
Intermediate position
Strong international orientation
Intermediate position
Strong regional business focus
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Type of competitors and competition
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Factors Cluster 1 Cluster 2 Cluster 3 Cluster 4Main competitors
Smaller number of main competitors Main competitors often larger in size
Smaller number of main competitors Main competitors often larger in size
Smaller number of main competitors Main competitors often larger in size
Larger number of main competitors Main competitors often similar in size
Type of competition
Non-price competition Technological edge
Non-price competition Technological edge Relatively low relevance of customer service and flexibility
Non-price competition Relatively low relevance of customer service and flexibility
Price competition
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Features of competition
Msc in Innovative Technology Engineering
Factors Cluster 1 Cluster 2 Cluster 3 Cluster 4Features of competition
Difficult of substitution Shorter product life cycles Faster pace of technology
Difficult substitution Intermediate position in terms of market dynamism
Difficult substitution Intermediate position in terms of market dynamism
Easy substitution Longer product life cycles Slower pace of technology
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Types of innovation
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Factors Cluster 1 Cluster 2 Cluster 3 Cluster 4Type of innovator
Comprehensive innovators Product-only innovators
Comprehensive innovators Product-only innovators
All types of innovators
Process-only innovators Nascent innovators
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Effects of innovation
Msc in Innovative Technology Engineering
Factors Cluster 1 Cluster 2 Cluster 3 Cluster 4Degree and effects of innovation
Quality innovations
New-to-market innovations New-to-firm innovations Relatively low relevance of most effects related to process innovations
No specificities Lower engagement in significant product innovation Lower relevance of product-oriented innovation effects
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Combining Paper 1 and 2
Msc in Innovative Technology Engineering
IP Strategies
Appropriability Regime
Dominant Design Paradigm
Pre Paradigmatic Stage
Post Paradigmatic Stage
Complementary Assets
Generic
Specialized
Co Specialized
AM
Effects of Inn.
PrpertiesOf Innov.
Compet.
Environ.
* Interpretation
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• Of the three fundamental blocks affecting distribution of economic rents, appropriability regime is most controllable.
• SME’s tend to choose appropriability modes that best suit their environment and the nature of innovation.
Conclusions
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Thank You.
~ Questions Please ~
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