Technology & IP Strategy – Block, Run, Team-Up or all 3?

The June 2007 edition of LESI’s les Nouvelles carried an interesting article by Dr Adrian Carter from Boehringer Ingelheim on co-promotion and co-marketing partnerships in the pharmaceutical industry. In it, he cites the well known strategic choices between ‘block’ (preventing competition), ‘run’ (outpacing competition with new products) and ‘team-up’ (collaborating with potential competitors) and highlights how all three are used in the pharmaceutical industry. There’s also ‘open’ – ie open source – currently incredibly difficult in the context of pharmaceuticals.

The intellectual property strategy which optimally underlies each of these choices is, of course, quite different.

The ‘block’ approach requires careful consideration of the IP to be created, how it will be protected, and then vigourous enforcement. The organization must be prepared (psychologically and resource-wise) to effectively plan-out an intellectual property strategy well in advance and then methodically execute it with appropriate aggressiveness as needed (and all the while adapting to the changing environment).

The ‘run’ approach requires the organisation to be geared towards fast movement from ideas through product development and then out the door to customers. There’s often little time given to planning out an IP strategy and, due to the larger number of products little internal incentive to protect or enforce all IP.

The ‘team-up’ approach relies on having unique attributes which are attractive to the partner organisation. This may be for example either an incredible IP asset base and the track record of using it, or a proven ability to operate a winning ‘run’ strategy.

The open strategy is similar to ‘run’ but also relies on collaborating (teaming-up) to open up new markets in the expectation that a small piece of a much larger pie is well worth the effort. Although to some it is counter-intuitive, protecting and strategically using intellectual property should still be a big part of an open strategy.

To simultaneously use of ‘block’, ‘run’ and ‘team-up’ for the same product requires enormous resources and an incredible ability to plan, effectively and fast. (To additionally use ‘open’ seems impossible, unless for a particular component of the end product.) Even the large pharmaceutical companies use the strategies in sequence. Commencing with block (or block and team-up) and ending with ‘run’ (or run and team-up) – ie using line extensions etc when the patent estate is no longer conferring an absolute monopoly.

Who would you nominate as the company that has done the best job at simultaneously applying these strategies for the same product?

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