Intellectual property management, dynamic capabilities and competitive innovation in the commercial aircraft industry

Abstract

In this paper we combine insights from two streams of literature within the broad academic domain of strategic management - namely intellectual property management and dynamic capabilities - to advance our understanding of the dynamics of competition and innovation in technology-intensive industries dominated by large companies with highly complex products and businesses, large operational scale, and broad international reach. We argue that a firm's IP management capability ought to be viewed as a dynamic capability, as propounded by Teece et al. (1997) and Teece (2007), and we accordingly propose a generic competition-influenced evolutionary pattern of patent application strategies, embodying three development phases: 1) passive strategy, during the early phase; 2) aggressive strategy, during the growth phase; 3) sophisticated strategy at the maturity phase. We test our ideas through a study of the patenting behaviour of two major competing firms in the commercial aircraft industry.