On the Effectiveness of Patenting Strategies in Innovation Races
Jürgen Mihm, Fabian J. Sting, Tan Wang (2015) On the Effectiveness of Patenting Strategies in Innovation Races. Management Science
Posted: 20 Jul 2013 Last revised: 29 Jul 2015
Date Written: 2015
Abstract
Which, if any, of a firm’s inventions should it patent? Should it patent at all? Many companies engaged in an innovation race seek a patenting strategy that balances protection of their intellectual property against the knowledge spillovers resulting from disclosure requirements. Not much is known about factors that determine the patenting strategy best able to resolve this trade-off. Although scholars in various management, economics, and engineering disciplines have researched patents and patenting regimes, little work has addressed the normative issues that pertain to forming an appropriate firm-level patenting strategy. We develop an inventory of real-life patenting strategies and integrate them into a coherent framework. Our simulation model characterizes the optimal patenting choices for different environmental and firm-level contingencies while capturing the dynamics between competing firms.We identify the firm’s research and development strategy as the most salient determinant of its optimal patenting strategy. Our research contributes to establishing a contingency theory of patenting strategies.
Keywords: patent strategies; innovation races; NK modeling; games on NK landscapes; strategic interaction on NK landscapes
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