Journal of Intelligence Studies in Business

ISSN: 2001-015X

Journal of Intelligence Studies in Business

Journal of Intelligence Studies in Business

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Journal of Intelligence information: https://ojs.hh.se/index.php/JISIB/index
Studies in Business Vol. 9, No. 2 2019

Study on the various intellectual property

Included in this printed copy:
Making sense of the collective intelligence
field: A review
Klaus Solberg Søilen pp. 6-18
management strategies used and implemented by
ICT firms for business intelligence
Collective intelligence process to interpret weak
signals and early warnings
Fernando C. de Almeida and Humbert Lesca pp. 19-29

Study on the various intellectual property

management strategies used and implemented
by ICT firms for business intelligence
Shabib-Ahmed Shaikh
and Tarun Kumar Singhal
pp. 30-42

Business Intelligence using the Fuzzy-Kano model

Shabib-Ahmed Shaikha*, Tarun Kumar Singhalb
Soumaya Lamrhari , Hamid Elghazi pp. 43-58
and Abdellatif El Faker

A new corpus-based convolutional neural network

for big data text analytics
aSymbiosis International (Deemed University) (SIU), Pune, Maharashtra,
Wedjdane Nahili, Khaled Rezeg pp. 59-71

India, bSymbiosis Centre for Management Studies (SCMS), Symbiosis

and Okba Kazar

Using open data and Google search data for

Vol 9, No 2, 2019

competitive intelligence analysis

International (Deemed University) (SIU), Noida, Uttar Pradesh, India

Jan Černý, Martin Potančok pp. 72-81
and Zdeněk Molnár

The potential of business intelligence

tools for expert finding
Mehdi Dadkhah, Mohammad Lagzian, pp. 82-95

*shabib.ahmed@gmail.com
Fariborz Rahim-nia and Khalil Kimiafar

Editor-in-chief:
Klaus Solberg Søilen

To cite this article: Shaikh, S.A. & Singhal, T.K. (2019) Study on the various
intellectual property management strategies used and implemented by ICT firms
for business intelligence. Journal of Intelligence Studies in Business. 9 (2) 30-42.
Article URL: https://ojs.hh.se/index.php/JISIB/article/view/407

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 Journal of Intelligence Studies in Business
Vol. 9, No. 2 (2019) pp. 30-42
Open Access: Freely available at: https://ojs.hh.se/

Study on the various intellectual property management

strategies used and implemented by ICT firms for
business intelligence
Shabib-Ahmed Shaikha* and Tarun Kumar Singhalb

aSymbiosis International (Deemed University) (SIU), Pune, Maharashtra, India

bSymbiosis Centre for Management Studies (SCMS), Symbiosis International (Deemed University)
(SIU), Noida, Uttar Pradesh, India

Corresponding author (*): shabib.ahmed@gmail.com

Received 30 September 2019 Accepted 25 October 2019

ABSTRACT Software technology is seeing enormous growth as it is used in all fields of

technology. It is continuously evolving at a rapid pace and has a short span of the technological
life cycle. The use of the software is not restricted only to information and communication
technology but is used in all fields of technology. In many cases, the inventive step of a product
or service lies solely in the software. Hence, the software plays a crucial role in all fields of
technology. However, ease of copying poses a financial risk for the software industry, thereby
creating major disincentives to the development of innovation. Still, the technology is changing
very fast and firms investing in this technology expect quick returns on their innovation
investments. Strategies for generating and managing intellectual property have subsequently
taken center stage for information and communication technology companies, and patents have
become an important feature providing maximum protection for any technology. Hence,
intellectual property rights strategies in general and patenting strategies especially play a
crucial role in the information and communication technology industry to be globally
competitive. Firms never publish or disclose their intellectual property strategies; hence, this
study makes use of the literature review to highlight various intellectual property management
strategies used by information and communication technology firms for managing their
intellectual property. These strategies can be offensive or defensive and may be used as
proactive or reactive depending on various aspects such as market, territory, technology, or
time. The insights provided in this work may help the research community from the IT domain
in industry and academia to learn and modify their strategies for patent acquisition.

KEYWORDS Business intelligence, competitive intelligence, IP strategies, organizational

performance, patents

1. INTRODUCTION retrieve, transmit, and manipulate data, often

in the context of a business or other enterprise.
1.1 Information Technology
IT encompasses the inputting, storing,
Information and communications technology retrieving, transmitting, and managing data
(ICT) is often used as an extended synonym for through the use of computers and various other
information technology (IT). IT is the networks, hardware, software, electronics, and
application of computers and telecommunication equipment (IPO, 2013).
telecommunications equipment to store, The core elements in the application of IT are
 31
computers and their peripherals consisting of 1.4 The need for IP strategies in IT
hardware and software.
The IT industry has rapidly globalized
(Cameron et al., 2006). As the software market
1.2 Intellectual Property started from the US, the US acts as a
trendsetter for the protection of software via
Intellectual property (IP) is an intangible asset
patenting. Other countries follow the US in
created from a human mind and having some
protecting software via patents (Cameron et
value (Kavida & Sivakoumar, 2008; Isa et al.,
al., 2006) as this protection promotes a nation’s
2009). Intellectual property rights are the
technological innovation (Wang et al., 2012). A
rights conferred on the persons for exploiting
fundamental problem for the software industry
their intellectual property within a specified
is the ease of copying, which often poses a
territory for a specific period. The intellectual
financial risk (Rao, 2001). This even creates
property rights framework provides various
significant disincentives to the development of
alternatives for protecting the intellectual
new and innovative software programs,
property generated from a business or required
hindering software development (McGowan et
for a business to be globally competitive
al., 2007). Robust R&D operations are
(WIPO-b). The exploitation and management
undertaken if protection is provided, which
of this intellectual property is often linked with
leads to the start of profitable businesses.
business sales, export quality and marketing
Failure to protect software firms' developed
needs, along with research direction strategies
products might affect a company’s ability to
to ensure that a firm remains competitive in a
operate freely at the primary level in the global
business (Zhang & Yang, 2016; Mahajan et al.,
market (Clarkson & Dekorte, 2006), which in
2015; Debackere & Veugelers, 2005; Zahra &
turn would threaten a firm’s own existence
Nielsen, 2002; Torvinen, & Väätänen, 2014).
(Dedrick & Kraemer, 1993; Jyoti et al., 2010).
The full value of IP can be perceived as an
Software innovations are usually incremental,
information source derived from its technical
fast-changing, and have a short lifecycle.
details available in patent data, its uniqueness,
Software is becoming more complex and
and its volume as over 100 million patent
sophisticated daily, with value-added features.
documents that are freely available online for
Firms investing in this continually evolving
use as early as 18 months after the filing of a
and changing technology expect concrete
technology (Khode & Jambholkar, 2017). Parr
protection for their IP and quick returns on
and Smith (2016) point out that the
their investments (Shaikh & Londhe, 2016).
commercialization of IP involves annual
In the field of information technology, trade
revenues of at least 5 trillion USD. Managing
secrets, copyrights, and patents are mainly
IP in general and patents in particular, has
considered for protection. While each of these
thus become crucial for the IT industry to
has its advantages and disadvantages, patents
survive. It is continuously evolving, has a short
are considered to provide the highest
technological lifecycle, and is hit by many legal
protection in the ICT sector, specifically for
challenges towards its protection, litigations,
software (Shaikh & Londhe, 2016). Patents
and trolls (Shaikh & Londhe, 2016).
qualify the protection of the functional aspect
of a product, process, or service, along with its
1.3 Strategies underlying idea. The idea behind this is that
software can easily be copied and
Strategies are futuristic plans conceived before
independently developed when it comes into
execution, depending on a set of predefined
the market, and hence trade secrets, as well as
rules or previous experiences. Krig and Sandra
copyrights, prove to be weak in protection.
(2017) define strategy as “the determination of
Additionally, copyrights are meant to protect
the basic long term goals and objectives of an
the nonfunctional aspects and expression of
enterprise, and the adoption of courses of
ideas and not the functional aspects and ideas.
action and the allocation of resources necessary
Hence patent protection in the field of IT and
for carrying out these goals.” The main aim of
mainly for software is gaining importance. At
strategies is to sustain long term competitive
the same time, protecting software under
advantage in business via means of building
patents also ensures that no one company can
defenses against competitive forces (Porter
claim a monopoly under a particular
1993). Strategies can be proactively planned or
innovation, thereby increasing competition
reactive, based on situations and market
(OECD, 2008; the United States. Federal Trade
places.
Commission, 2003). Many important
32
innovations have reached the marketplace Amongst various IP rights, trade secrets,
with the help of the patent system (EPO, 2013). copyrights and patents can be used for
Different patent filing strategies are used by protection in the ICT domain, especially for the
firms to gain a competitive advantage and software; however, patents are the preferred
survive and thrive in the market place (Shaikh choice of firms as they provide stronger
& Singhal, 2018). This study focuses on protection for the functionality of a product, the
patenting strategies of IT firms and uses it process of service (Shaikh & Londhe, 2016).
interchangeably with the term IP strategy. Patent filing strategies can be to secure,
enforce, exploit, or block, which depends on the
2. IP STRATEGIES FOR BUSINESS level of innovativeness of the inventions
INTELLIGENCE (Süzeroğlu-Melchiors et al., 2017). Hence,
patenting decisions are seen as important
An IP strategy is a subset of the business
strategic considerations. Firms can gain
strategy (Barrett, 2002) that can be used to
maximum value from a patent depending on
apply business intelligence for decision
their ability to enforce the patent (Arrow, 1962;
making. IP strategy plays an essential role in
Holt et al. 2015; Dornelles, 2016). To enforce
defining, creating, and sustaining a winning patents, firms need to prepare well in advance
business strategy enabling value creation and
and create strategies to embed their business
strengthening multiple aspects of an effective
strategies with patenting strategies to gain a
IP strategy (Pargaonkar, 2016). In the current maximum advantage in the long run. Patent
knowledge economy, intangible assets have
strategies encompass a set of resource
gained more valuation, and hence a significant allocation decisions and underlying “logic” of
portion of enterprise value is presently
decision making about patents (Somaya, 2012).
governed by IP rights (Fisher & Oberholzer-
Firms seek patents to prevent copying, fence
Gee 2013). These IP rights, when governed
and build thickets, attaining licensing income,
wisely, yield value, and put a firm in a
preventing hold-ups and rewarding R&D
competitively advantageous position. The IP personnel, in addition to highlighting the
creation, its possession, and utilization can
innovativeness and competences of the firm
bring practical, long-term, and direct economic (Cohen et al., 2000; Rudy & Black, 2018;
interest to nationals (Guo & Li-Hua 2008). IP
Useche, 2014). Firms with active and
strategies thus play an essential role in
systematic patent management outperform
governing a firm’s IP and are mainly aligned those that remain inactive and non-strategic
with the overall business strategy to
(Soranzo et al., 2017)
successfully survive and thrive in the market
Protection of IP does not happen
place. IP rights are used to create income, to
automatically and may require active
defend the firm’s competitive status, and to
measures to enforce IP rights and at the same
address competitiveness (Davoudi et al., 2018). time, defend and preserve those (Spruson &
IP is a valuable financial and strategic resource
Ferguson, 2007). Patent filing strategies can be
that needs careful management by every used to secure, enforce, exploit, or block
organization. Without proper IP management,
competition, depending on the level of
organizations may expose themselves to
innovativeness of the inventions (Süzeroğlu-
unnecessary risks and infringements as they
Melchiors et al., 2017). Firms that remain
may be unaware of the value and benefits of the
inactive and non-strategic for patent
IP they possess (Spruson & Ferguson, 2007).
management are outperformed by firms that
IP strategies refer to planning related to
have an active and systematic patent
intangible assets. Its management involves the
management system in place (Soranzo et al.,
formulation and execution of plans related to 2017). The survival of the firms is based on how
IP strategies. An appropriate IP strategy and
they perceive IP and patents, in particular,
its management enable smooth technology and generate it and then utilize it further. It has
knowledge transfer (Guo & Li-Hua 2008). In
become essential for firms to exploit their
general, an IP management strategy includes:
technologies internally as well as externally to
avoid losing their value to competitors
1. Creating or acquiring intellectual
(Chesbrough, 2003). Firms can gain maximum
property benefit from a patent by their ability to enforce
2. Governing the owned intellectual
the patent (Arrow, 1962; Holt et al. 2015;
property, and
Dornelles, 2016). Patent strategies include all
3. Extracting value from the owned decisions involving resource allocation along
intellectual property
 33
with the logic of decision making about patents • Block competing products
(Somaya, 2012). Firms also need to ensure that • Generate income from
the IP they perceive and generate is aligned commercialization
with their business needs and strategies to • Deter potential infringers
achieve long term objectives. A valid IP • Defend an infringement action
management strategy assists firms in • Attract investment
capturing and protecting the outcomes of their • Raise the organization’s profile, or
investment in innovation. Management of • Increase the sale price of the
intellectual property involves: organization’s shares or business

1. An understanding of what intellectual IP management strategies can be viewed as

property is, offensive or defensive, depending on where and
2. When the intellectual property has how they are applied (Spruson & Ferguson,
been created, 2007; Fisher & Oberholzer-Gee, 2013). An
3. The value of the created knowledge, offensive IP strategy is generally to take action
4. And how to protect intellectual against an infringing party, while a defensive
property that has value. strategy is intended to obtain IP to minimize
the risk of being sued by others for
Competitive advantage over rivals is achieved infringement. Striking the correct balance
by firms depending on how well they align their between being offensive and defensive is a
IP strategies with business strategies. This complex task. It may depend on the market
paper highlights the various strategies used by place, market size, number of players, and the
firms for protecting and managing their IP as technology in question. New entrants in the
available in the literature of the work carried markets, as well as old players, can exercise
out by researchers. It also brings forth both these strategies. Different strategies are
enablers, which may be the outcome of the listed under these two main categories are
strategies implemented by ICT firms along highlighted below.
with indicators of organizational performance.
2.1.1 Defensive IP Strategy
2.1 Intellectual Property
Defensive strategies seek to provide a firm the
Management Strategies
freedom to operate and commercialize its
Motohashi, (2008) defines a firm’s IP strategy invention without hindrance from patents that
as “strategic use of its technology pool, which is belong to others (Rudy, & Black, 2018; Somaya,
a firm’s capacity for innovation output, such as 2012). They are helpful when there is high
new products or processes, based on in-house fragmentation in the market for patentees, and
R&D or acquired technology from external firms are unable to arrange licensing due to
sources.” The core purpose of an IP strategy is transaction costs (Jell et al., 2017). Defensive
to develop an IP economy (Guo & Li-Hua, strategies are thought to be reactionary,
2008). Without appropriate strategies, firms focused on protecting the current value of IP
that are not patenting will be unable to (Somaya, 2003; Rudy & Black, 2018). Various
capitalize on their investments, and defensive IP management strategies, as
researchers may be prevented from conducting highlighted below, are implemented by
even the most basic research (Clarkson & business firms for enhancing their
Dekorte, 2006). Hence, the role of patent organization's performance.
management has changed from creating a
purely legal barrier for competitors to a a) Legal Privilege: Legal privilege can be
sophisticated utilization of patents to achieve asserted by firms that do not own IP in
maximum returns on innovation (Süzeroğlu- a technology (Rudy & Black, 2018).
Melchiors et al., 2017). Firms attempt to affect their
IP management is the use of systematic competitors’ patent holdings by using
processes to understand the intellectual opposition and re-examination
property of others and to generate your own proceedings (Somaya, 2012). They can
(Spruson & Ferguson, 2007). IP management use legal suits to either defend the
strategy needs to address organizations' needs legality of the use of a technology or
to achieve commercial goals successfully. The altogether challenge the validity of the
firms may use IP as a tool to: patent holder’s claim on the technology.
34
However, defensive litigation is a rare the context of standard-setting, because
option as there is a high cost of once a standard is picked, any patents
litigation, along with an emotional toll. necessary to comply with that standard
Even if a firm wins, other competitors become truly essential and each patent
in the market are also free to capitalize can confer significant market power on
on the success, and if litigation is lost, its owner, and the standard itself is
damage awards can be huge (Fisher & subject to holdups if these patent
Oberholzer-Gee, 2013). holders are not somehow obligated to
license their patents on reasonable
b) Invent Around: Firms mainly chose to terms (Shapiro, 2000). Firms also
commercialize their IP possessions collaborate to form alliances within the
using in-house development and supply industry. Collaboration is built for
of goods or services based on “inventing transferring, bifurcating, or reducing
around” a said technology. Inventing the consequences of potential risk via
around a said technology provides an failure in R&D output. Collaboration
alternate way to tackle technology may also be formed in cases when there
blockage (Cohen et al., 2000; Fisher & are fewer resources available for
Oberholzer-Gee, 2013). It helps firms to delivering technology. Collaboration
increase their R&D capabilities, forms efforts trigger opportunities for value
a basis for the investment in new creation and at the same time, also
products, a defense against others’ present substantial challenges in
business strategies, and a competitive seeking to appropriate this value
advantage in the market place (Lang, (Belderbos et al., 2014).
2001). However, it requires huge
investments, manpower, and resources. d) License-In: Licensing-in comprises
The time taken to bring a product into procurement of required technologies
the market is also longer. under license from an IPR owner.
Licensing-in is a way to acquire
c) Collaboration: Instead of inventing products or technologies without
around solely, firms can share R&D expending the time and resources
resources by collaborating with other necessary to develop them
firms via universities, intra, and inter- independently. In some cases,
industry partners who are seeking an licensing-in is required to gain access to
alternative, complementing technology technologies that are proprietary but
for the technology in question. standardized in products of interest.
Collaboration helps firms benefit from Licensing-in reduces the time to market
external knowledge partners, which and might also be used to legalize
facilitates the blending of external and infringement. For faster entry into the
internal ideas into new products, market place, it is recommended to
processes, and systems (Belderbos et license technology from the market
al., 2014). It also helps reduce the leaders. It helps a firm to operate freely
financial burden and also distributes in the market without the fear of
the risk in case of failures (Fisher & litigation. The difference in cost
Oberholzer-Gee, 2013; Holgersson, between acquiring knowledge from
2012). Firms also collaborate with another person and originally creating
competitors to infiltrate their that knowledge is substantial
intellectual knowledge and learn about (Lindberg, 2008). Licensing can also be
their technological skill sets (Krig & sought by companies for allied services
Sandra, 2017). Firms work with required for the functioning of their
government and foundations in product or service. By doing so, firms
bringing out new manuals and concentrate on the core product
standards in technological development and license the other
development. Through such dependencies from outside. Firms also
collaboration, firms may emerge as license-in technology for operational
leaders in technology, which maintains freedom even if they have developed a
those standards (Krig & Sandra, 2017). technology in-house in case its IP is
Blocking patents are also common in held by others. A patent license is, in
 35
such cases, seen as “a simple means of inventions, pay higher royalties, or to
collecting money in exchange for build a fierce reputation (Somaya,
agreeing not to sue” (Feldman & 2012). Firms also make use of external
Lemley, 2015). Licensing-in helps firms attorneys to file patents while following
increase their business values and a “maximization approach,” resulting
profits and also avoids litigation (Krig in more claims, filing in more countries,
& Sandra, 2017). Firms can also and more PCT applications (Süzeroğlu-
coordinate the acquisition of multiple Melchiors et al., 2017). Exercising
related patents using licensing to market powers through litigation is
create patent fences or thickets, which high in the software industry compared
later can be used as a bargaining chip to other sectors. Patent litigation is
in cross-licensing negotiations (Reitzig, undertaken by patent holders to both
2007). dissuade and economically punish the
patent infringer (Reitzig, 2007).
However, patent infringement is often
2.1.2 Offensive IP Strategy
challenging to detect, and enforcing a
Offensive patenting, on the other hand, is patent through litigation can be
mostly exercised by firms having a broad extremely costly, disruptive, time-
patent portfolio or those owning patents of high consuming, and unpredictable
quality. Offensive IP management strategies (Somaya, 2012).
are thought to be proactive, focused on
protecting the future value of IP (Somaya, b) Sell: Instead of capitalizing on the
2003; Rudy & Black, 2018). The various value of innovation, firms may also
offensive IP management strategies are need to make trade-offs in their patent
highlighted below. strategies to allow their technologies to
create greater value in the marketplace
a) Exercising Market Power: As patents and out compete other innovative
authorize the creation of monopolies, solutions (Somaya, 2012). An outright
firms exercise market power by sale is another option that can be
ensuring that no other firm infringes on exercised by the industry if the value of
its technology. The most valuable the technology is high in the hands of
patents are not those likely to be used others (Krig & Sandra, 2017). This
by the patent holder but those likely to enables an increase in competition.
be infringed upon by competitors Inventors can transfer their
because the primary role of the patent technologies to other firms within the
is as a bargaining chip to buy the same industry that are better suited to
freedom of action (Hanel, 2006). make the application, production, and
Although a patent provides its holder a marketing investments that are
right to commercialize or license its necessary to turn inventions into
product, firms make use of enforcement commercially successful innovations,
mechanisms via litigation in pursuit of by enabling combinations of resources
profits (Nerkar et al., 2007). Generally, of different types (Holgersson, 2012).
the value of the patent right reflects the Selling can also be an attractive
power of the patent to contribute to the strategy for firms if the innovator firms
profitability of the company in some lack manufacturing or marketing
manner (Holt et al. 2015). Firms facilities (Fisher & Oberholzer-Gee,
employ patent litigation to detect 2013).
imitation and aggressively enforce their
patent’s rights against possible c) License Out: Licensing-out requires
infringement (Somaya, 2012; Rudy & that the owner of IP, licenses its IP to a
Black, 2018). The use or threatened use licensee in return for royalties and/or
of litigation helps a firm to protect its other considerations. It allows
IP and at the same time gain maximizing license revenue, thereby
competitive advantage (Rudy & Black, fully exploiting a firm's R&D
2018) by enforcements with a desire to capabilities (Parr & Smith, 2016).
take out competition, encourage Many software vendors prefer to license
infringers to stop using patented the use of their product rather than sell
36
them, thereby retaining ownership. e) Donate: Technology in the hands of a
Licensing-out is also an enabler to few helps personal gains, but when it is
ensure that the competitive firm in the public domain it helps society.
becomes dependent on a firm’s Citing this example, software
technology and does not invest in its companies like IBM, Google and
R&D, thereby locking out the option of Redhat try to donate some of their
inventing around by competitive firms patents in the public domain (Wen et
and impeding innovation (Reitzig, al., 2015). However, this is often done to
2007; Krig and Sandra, 2017; Fisher & understand how technology can be used
Oberholzer-Gee, 2013). Licensing-out and led further or is perceived by
also helps reduce the transaction costs others. This also opens the doors of
and at the same time, may also certify bigger firms to identify targets to
invention quality to potential acquire or collaborate in the future.
technology partners, thus encouraging Innovators may also choose to provide
them to license the patented technology their innovation freely in cases where
(Somaya, 2012). Most of the time, firms there is low return from licensing of
patent technology with a motive to patents due to weak protection or
improve its bargaining position in involving high transactional costs
patent licensing (Mihm et al., 2015). (Harhoff et al., 2003). It can also be
disclosed freely to increase one's
d) Cross Licensing: Cross licensing is reputation in the market place.
another form of barter of technology Donations can also act as signals of a
which may be royalty-free, or with a firm's R&D capabilities, which in turn
flow of royalties (Hanel, 2006). Cross may attract financial capitals (Fisher &
licensing occurs when two competing Oberholzer-Gee, 2013).
firms with different R&D strengths
take advantage of each other’s f) Signaling and Disclosure:
intellectual assets. Cross licensing Signalling technological advancements
creates the same sort of synergy as a or disclosure of technology in the public
joint venture without the inconvenience domain sends signals to competitors
and delay of setting up joint operations. about a firm’s commitment towards a
These are relatively common in high technology. This influences rivals to
technology and knowledge-led fields. exit R&D competition and redirect their
Cross licensing can be a remedy to cut R&D efforts (Gill, 2008; Somaya, 2012).
through patent thickets. If two patent This may also be done by firms to
holders are the only companies capable generate prior art, so rival innovative
of manufacturing products that utilize firms may find it harder to obtain
their intellectual property rights, a patents in the same technology domain,
royalty-free cross-license is ideal and the focal firm may be able to catch
(Shapiro, 2000). Cross licensing is the up with competitors in the race to own
preferred means by which large critical patents (Baker & Mezzetti,
companies clear blocking patent 2005; Somaya, 2012; Reed & Storrud-
positions amongst themselves or settle Barnes, 2011). Firms may patent “bad”
outstanding patent disputes (Shapiro, inventions to mislead rivals in their
2000). It is also seen as an alternative efforts to build on the technologies
strategy for building large patent disclosed in patents (Somaya, 2012).
portfolios that helps to ward off patent Specific patent actions may also be
infringement and gain access to rivals’ undertaken to signal the firm’s patent
technology (Motohashi, 2008; Fisher & strategy and intentions credibly.
Oberholzer-Gee, 2013; Rudy & Black, Signaling and disclosure can be done
2018). Patents can also be used to through article publication
negotiate a cross-licensing agreement (Holgersson, 2012) using a companies’
that helps in reducing the cost of official website or web-based online
acquiring the needed technology (Lang, publication portals such as IP.com or
2001; Cockburn & MacGarvie, 2011). Research Disclosure. It is an efficient,
effective, and inexpensive strategy to
prevent competitors from patenting in
 37
the technological space described in the their portfolio will have a higher future
publication disclosure (Barrett, 2002). performance than a company without
patents. Patent fencing is an expensive
g) Patent Fencing: Individual patents but powerful strategy to discourage or
are often ineffective as others can build stop competitors as this tool makes it
technology around them (Jell et al., difficult for a competitor to expand on
2017). Firms, therefore, file patents their patent portfolio without
with the sole aim of blocking infringing on patents held by this
competitors, ensuring freedom to strategy implementer (Jackson, 2007).
operate (Hanel, 2006; Guellec et al.,
2012; Weatherall & Webster, 2014). h) IP insurance: The need to address IP
Firms try to patent not only the issues increases with the success of
technology but also all related organizations as such organizations are
technologies of said technology, thus increasingly monitored by competitors
creating large patent portfolios for possible infringements (Spruson &
(Shapiro, 2000; Lang, 2001; Weatherall Ferguson, 2007). Business needs to
& Webster, 2014; Rudy & Black, 2018). protect its IP risks in-house via a legal
Known as “patent fencing”, “patent compliance program and also by
pools”, “patent stacking”, “blocking”, outside means via insurance. Apart
“clustering and bracketing”, “blitzkrieg, from traditional insurance policies to
consolidation”, “blanketing and manage risk, firms should effectively
flooding”, “fencing and surrounding”, use other risk management devices,
“patent harvesting and ramping up”, such as legal compliance programs, to
“portfolio and network arrangements” ensure freedom to operate, new types of
(Jackson, 2007) or “patent thickets”, litigation insurance, and net loss
the combination of multiple patents insurance (Simensky & Small, 2000).
makes it costlier to invent around, and Legal compliance can be used by firms
they block competitors thereby forcing to avoid infringement of others' IP and
competitors to license and pay higher at the same time to protect their IP
royalties (Cohen et al., 2000; Jell et al., from infringement by others to
2017). These patent pools help firms maximize their value. However, legal
when threatened (or sued) over another compliance is rarely used in offensive or
firm’s patents, as the focal firm can defensive roles. The cost of IP
threaten back with its patents, leading enforcement in the software domain is
to a situation of mutual holdup that too expensive, and hence it is suitable
forces a faster resolution of the standoff for firms to insure against the financial
(Somaya, 2003; Ziedonis, 2004). Firms costs of enforcement proceedings
also use the “block to fence” strategy by considering the significant amount of
acquiring a substantial number of time, effort, and resources spent in
patents not only for their core creating and protecting the IP.
innovations but also for related Depending on the type of insurance and
processes and substitute products, its cover, the IP insurance may cover
hoping to drive up the cost of “inventing the costs of bringing legal action to
around” (Fisher & Oberholzer-Gee, prevent or stop IP infringement by
2013). Studies have also pointed out unauthorized users along with costs of
that the broader a firm’s patent legal expenses to enforce the IP right
portfolio, the more likely it is to develop and costs of defending cross-claims
new products (Rudy & Black, 2018). brought by the alleged infringer. It may
This private strategic value of patents also cover the costs of proceedings
may be increased in the presence of brought against an organization for
‘thickets’ which can help in the growth infringement of IP owned by a third
of R&D activities by constraining the party, including damages payable by
ability of firms to operate without the organization. IP insurance is
extensive licensing of complementary advisable to firms in the early stages of
technologies (Noel & Schankermann, IP creation, and it helps the firms to
2013) and outsiders may consider that spread the risks and financial costs
a company with additional patents in involved in IP lawsuits and at the same
38
time, acts as a deterrent to potential significant patent portfolio is available in hand,
infringers (Spruson & Ferguson, 2007). firms should try to use a more proactive
offensive approach with strategic patent
An offensive IP strategy is generally to exercise management that could lead to a competitive
market power and take action against an advantage (Figure 1). IP management strategy
infringing party, while a defensive strategy is thus leads to an increase in a firm’s value and
intended to obtain IP to operate freely in the its performance.
markets and minimize the risk of being sued by This study has several significant
others for infringement. Having a correct implications not only for IT firms but also for
balance between offensive and defensive academics and practitioners involved in IPR,
strategies is a complex problem as it is specifically in R&D and patenting. An IP
dependent on the market place, market size, strategy is driving businesses to align their
number of players, and the technology in business strategy with IP strategy to survive
question. and thrive in the market place and set future
Industries are more inclined to undertake goals along with competitive advantage. The
offensive or defensive strategies to enjoy present research explores various offensive and
positive performance outcomes (Somaya, 2003; defensive IP management strategies IT firms
Ziedonis, 2004; Rudy & Black, 2018). The are deploying to gain a competitive advantage
patent strategy of firms is usually tied with its in the market place. These highlighted
business strategies depending on its market strategies may provide the managers with an
place, market size, players involved along with insight into various options they may deploy
the technology, and its protection. While the within their organizations to achieve a
average patent may be a weak and porous competitive advantage.
instrument, carefully crafted patents and
combinations of patents may become more 3. CONCLUSION
effective tools for a firm’s strategy (Somaya,
IP in the field of ICT is gaining importance
2012). Firms’ IP strategies are evolving, and
with the advent of new emerging technologies.
licensing decisions may be due to patent
Creating and managing IP in the field of ICT
infringement, or a firm involved in a patent
has become a key differentiator for the success
infringement case may adopt a serious view of
of ICT firms as the industry is moving with a
IP management (Motohashi, K. 2008).
rapid pace of innovations that have a shorter
Generalizing, it can be concluded that
life cycle. The exploitation of IP and patents in
initially, when firms do not have patents or are
particular is often linked with business sales,
new entrants in a technological market, they
export quality, and marketing needs, along
should use a defensive approach and follow
with research direction strategies to ensure
generic patenting strategies while trying to
that a firm remains competitive in business.
accumulate a patent portfolio. When a

Figure 1 Patenting strategies and firm’s value.

 39
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various IP management strategies to achieve and Social Factors. Princeton Univ. Press,
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