IP Strategy – more than meets the eye

(By Duncan Bucknell,
co-written with Joanne Sinclair,
Consulting Editor.)

Duncan caught up with
Deepak Somaya when in Washington earlier this year. Deepak is an Assistant
Professor at the R. H. Smith School of Business at the University of Maryland.  (Deepak’s Bio)

Please tell us a little about your work.

I am a professor in strategic management, so my
fundamental goal is to understand how companies can be successful by employing
different strategies. I am particularly interested in intellectual property
strategies, as well as other managerial approaches to protect and leverage a
company’s intellectual assets.

It is very important to me as a researcher to ground this
understanding in rigorous theoretical models that can then be tested with
real-world data. This gives the research findings and conclusions a great deal
of robustness and longevity, rather than it being simply someone’s opinion.

How did you become interested in intellectual property?

I happened to be a Ph.D. student at Cal (University of California at Berkeley) at the same time as a lot of great
scholars in intellectual property, which was a fabulous resource. The primary lenses used by these scholars were either law (I
benefited greatly from Mark Lemley, Rob Merges, Pamela Samuelson) or economics
(Bronwyn Hall, David Mowery, Suzanne Scotchmer, Carl Shapiro, Hal Varian, Brian
Wright) … I may be unintentionally omitting some people. I wanted to do
something a little different … more managerial, strategically oriented …
closer in spirit to David Teece, who was a big influence. I got an opportunity
to work on a project studying international differences in patent protection,
and it just went on from there.

3. Could you please
tell us your current working definition for intellectual property strategy ?

To me, intellectual property strategy encompasses the top
management decisions about the use of intellectual property to support business

I should clarify a little here. Sometimes the conversation about IP can easily
get bogged down in the minutiae of IP law. IP strategy is only really successful if one
can abstract away from some of this detail and focus on the big picture of what
decisions are important, and how they matter to the company.

4. What would you
say are the key lessons from businesses that have come out of your work so far?

Let me list two sets of ideas that I think are valuable.
The first is to be disciplined and clear about what IP strategy one is pursuing
for a given line of business. This is not a stand-alone decision. It depends on
the firm’s strengths and strategic goals in the business. In most cases, I
think the strategy boils down to one of 3 “generic” strategies – a
proprietary strategy, a defensive strategy, or a leverage strategy.

The second idea connects patent strategy and business
models in industries that I call “multi-invention” industries.
Essentially, these are businesses where there are lots of inventions needed to
make end products, many of them patentable. Companies may just go ahead and
commercialize and “worry about IP later.” Sometimes, they are too
obsessed with IP and don’t think through their business model. In these
situations, business models and IP strategy really go hand in hand. One cannot
really think about one without the other. So, one needs to develop a good
strategy to commercialize innovation, and simultaneously combine this with a
well-crafted and compatible intellectual property strategy.

5. Where do you see
the future of IP Strategy heading? (For example, I personally think that
over time, open source / creative commons type systems will increasingly be
demanded by consumers across all industries. There will be great rewards for
those who properly prepare for this.)

In my mind, the knowledge and relationships that move
when employees move is really big. This goes beyond legal IP alone. It’s in a
zone where IP strategy meets strategic HR meets business strategy. I think
companies will struggle with this issue for some time to come. A significant
fraction of my current research is directed towards this area.

In addition, I think there is still a lot of room for
better understanding and strategizing in multi-invention contexts.

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