Increasing Profits by Strategic Patenting—A Change of Perspective from Bottom–Up to Top-Down

Abstract

Classical patenting is driven by what one might consider an “internal” view of the firm, in which patents are primarily obtained for protecting self-made inventions based on one’s own research activities. This corresponds to a bottom-up approach where patents originate from the bottom of research and development activities. Sometimes and occasionally these patents can be used in upper business and management layers for actually generating profits. In contrast, strategic patenting is driven by an “external” view of the firm. This external view is not primarily focused on the protection of internal inventions simply for the sake of staking one’s claim vis-à-vis a de facto non-existent conflict party. Instead, it is directed at a particular external “target”, i.e. a firm or group of firms such as competitors, suppliers or demanders. This corresponds to an opposite top-down approach in which top business decisions primarily determine which patents matter. As a direct consequence these patents guide research and development activities at down layers. The basic concept behind strategic patenting is a coordinated improvement of a firm’s comparative IP right (Intellectual Property Right) situation vis-à-vis this target. The desired result of strategic patenting is a purposive “hit on target” as compared to the scattered, uncoordinated approach of classical patenting that hits targets rather randomly. Since all patenting activities of the firm are intentionally targeted against specific firms determined in a top management decision, strategic patenting is more efficient than classical patenting.