Outward Licensing Research Articles

The impact of intellectual property types on the performance of business start-ups in the United States

Using a large, longitudinal panel of US start-ups collected between 2004 and 2011, this article shows the extent to which intellectual property (IP) types, for example trademarks, patents, copyrights and outward licensing, enhance multidimensional performance. An ordered probit analysis corrected for sample selection bias, estimates performance to derive the following conclusions. First, trademarks and out-licensing IP types increase a firm’s chances of being a high performer, confirming the importance of certain forms of IP protection for start-ups. Second, patenting significantly reduces the chances of being a high performer, suggesting patenting has limited performance benefits for start-ups. Third, few performance synergies exist in the joint use of IP types, suggesting that strong complementarities among IP types are limited. While out-licensing patents and out-licensing copyrights increase performance, out-licensing patents and out-licensing trademarks diminish it. Furthermore, registering more trademarks and out-licensing more trademarks also diminishes performance, suggesting start-up firms should keep trademarks in-house.

Why do some patents get licensed while others do not?

To understand why some patents get licensed and others do not, we estimate a portfolio of firm- and patent-level determinants for why a particular licensor’s patent was licensed over all technologically similar patents held by other licensors. Using data for licensed biopharmaceutical patents, we build a set of alternate patents that could have been licensed-in using topic modeling techniques. This provides a more sophisticated way of controlling for patent characteristics and analyzing the attractiveness of a licensor and the characteristics of the patent itself. We find that patents owned by licensors with technological prestige, experience at licensing, and combined technological depth and breadth have a greater chance at being chosen by licensees. This suggests that a licensor’s standing and organizational learning rather than the quality of its patent alone influence the success of outward licensing.

PRÁCTICAS DE INNOVACIÓN ABIERTA EN PROVEEDORES DEL SECTOR DE AUTOMOCIÓN: IDENTIFICACIÓN Y FACTORES CLAVE EN SU PUESTA EN PRÁCTICA

Open innovation represents a research field into the business organization area. Though, there are many researchers and practitioners from different areas and sectors that consider that OI is a wide and diffuse concept. This research encompasses into the open innovation literature, but it is focused on the automotive sector, and more specifically, in the providers of services of Original Equipment Manufacturers (OEMs). Our study has a double objective: on the one hand, to illustrate which open innovation practices are implemented by OEMs’ suppliers. We show the agents that participate in each of them, and the objectives that the providers have got with its implementation. On the other hand, we highlight the factors that are most relevant to put into practice these open innovation practices for those firms whose main customers are OEMs. In order to get these objectives, we have carried out a multiple case study with seven suppliers from different departments of OEMs. Our findings show that the most common practice these firms implement is the joined development, even they have found relevant performance with regional innovation cluster, innovation contest, inward and outward licensing of IP, joint venture and lead user method. This research permits obtaining a set of conclusions that may be helpful for both the researchers interested in OI and those managers and practitioners that implement OI practices in order to be more fruitful for their firms.

Patenting Activities and Firm Performance: Does Firm Size Matter?

Whereas prior research has provided valuable insights into the willingness of small and medium‐sized enterprises (SMEs) and large firms to engage in patenting, a comparison of the performance implications of patenting activities across small and large firms is still lacking. This gap is important becauseSMEs and large firms, having different resources and capabilities, might benefit from patenting activities in different ways. In particular,SMEs can be expected to benefit less from patenting activities in terms of protection against imitators than large firms. On the other hand, the propensity and ability ofSMEs to license out their patents and generate additional revenue streams might be relatively higher than that of their large counterparts.This paper studies the impact of patenting on licensing, innovation, and financial performance for bothSMEs and large firms, using multiple‐group path analyses on a sample of 358 manufacturing firms. Contrary to expectations, this study demonstrates that not only large firms, but alsoSMEs benefit from patenting in terms of commercializing product innovations. Moreover, for bothSMEs and large firms, such increased innovation performance in turn contributes to higher profit margins. Patenting activities also increase the ability ofSMEs and large firms to license out knowledge to external parties, and this positive effect is significantly stronger for large firms. However, neither inSMEs nor in large firms, these outward licensing activities generate short‐term financial benefits. Finally, the study demonstrates that patenting activities do not trigger significant cost disadvantages for eitherSMEs or large firms.Jointly, these findings provide unique insights in the value‐generating and cost‐increasing effects of patenting, suggesting that not only large firms, but alsoSMEs should consider patenting as a viable strategy to fully reap commercial benefits from their innovation activities. At the same time, they temper open innovation scholars’ expectations regarding the financial benefits of licensing out knowledge. Overall, these findings point to opportunities for optimizing the intellectual property management of bothSMEs and large firms.

The influence of firm and industry characteristics on returns from technology licensing deals: evidence from the US computer and pharmaceutical sectors

This study examines the relationships between firm and industry characteristics and firms' abnormal stock market returns accompanying the announcement of technology licensing deals. In particular, I examine the fit among firms' licensing activities, their resource endowments, and their industry context, and develop hypotheses on its impact on abnormal stock market returns after licensing deals. Analyzing 11 years of inward and outward licensing transactions in the US computer and pharmaceutical industries between 1990 and 2000, I find support for my argument that while firms profit from both inward and outward licensing, the magnitude of such profits is determined by licensing firms' resource endowments, and that these determinants have a different impact in different industry contexts. Understanding these relationships helps explain when firms should use licensing to exploit their proprietary technologies and make better predictions about the impact of licensing transactions on firm performance.

Open innovation process in developing-country manufacturing organisations: extending the Stage-Gate model

This paper explores how developing-country manufacturing organisations undertake open innovation activities along different stages of new product development (NPD) process. The data were collected through face-toface interviews with senior research and development executives, and design and product engineers in three manufacturing organisations in Pakistan. The results suggest that inbound open innovation activities such as customer involvement, external networking and inward licensing were prevalent in selected organisations, whereas outbound innovation activities such as venturing or spin-offs and outward licensing of intellectual property were not practiced. The three cases add to the academic knowledge via the extension of Cooper’s Stage-Gate model of NPD. The proposed staged model of open innovation not only demonstrates the dynamics of open innovation along different stages of NPD, but also incorporates the enabling role of information and communication technology. Given the focus of current open innovation literature on developed regions, this study explores different stages of the open innovation process in developing-country organisations.

Licensing the Technologies of the Small Manufacturing Firm: A Strategic Analysis

Exploiting technology as a strategy for business expansion by small manufacturing firms (SMFs) is analysed. Technological advancements from innovations is currently recognized as an important element of industrial competition. As substantial resources and risks are involved, the SMFs should strive to leverage on their innovationsdevelopment effort in order to derive a higher return from such technological investments. The sale of technology through outward licensing is one such move. However, for SMFs from a small, advanced developing economy, this move simultaneously compounds the daunting process of the exploitation of technological innovations with that of the internationalization of business. Importantly, venturing in this direction compels a SMF to critically define its basic strength and to stretch its resources beyond the frontiers of its normal operations. On this score, SMFs face four problems: that of overcoming entrepreneurial naiveté; of broadening their scope and perspective on technology; of building on expertise and credibility; and of enhancing experience and responsibility. Responses to these problems can be framed by addressing the underlying economic and strategic issues. The conclusion remarks that with the right approach and appropriate support, such ventures can indeed be rendered viable.