eThesis - School of Business electronic theses

A company's ability to innovate has been acknowledged as an integral factor of growth and companies are increasingly looking to outperform the competition by benefiting from innovation. The increased investments in research and development and the surge in patent filings in recent years resulted from the need to create more innovations and then subsequently protect those investments. However, profitable innovations have come from largely varying investments, setting the causality between R&D spending and profiting from innovation in a controversial position.

The open innovation approach offers companies an alternative access to innovation. Rather than spending on internal R&D, companies can find external technologies and solutions that fit their business model and acquire licenses to those intellectual property rights, thus relieving them of the wasted resources in reinventing the wheel. Companies can also license out their technologies that would not become innovations with their current business models.

This thesis aims to find reasons, as to why few companies embrace this approach and choose to patent their technologies in order to keep competitors off the market, when it has become increasingly difficult to avoid in the rapidly changing business environment. Open innovation management of intellectual property is not focused on protecting innovation, but on leveraging innovation. From this is derived the primary research question "Why are intellectual property rights over-utilized for market power and under-utilized for access to external knowledge?" The research also explores the effects that diversity of educational backgrounds may have on the IP management approach and its openness.

The research is conducted as a qualitative multiple-case study where representatives responsible for intellectual property issues in four different case companies are interviewed. The attitudes and IP management practices are mapped and compared to the key findings from the literature review. The empirical data is analysed using replication logic.

The study found that the composition, rather than overall diversity, of the IP management team affects the choice of IPR management strategies, but not necessarily the openness of the management approach. However, diversity of the IP management team affects the attitude towards outside knowledge through the level of monitoring processes and the reward structure. The overutilization of intellectual property for exercising market power is strongly linked to insufficient methods for determining the effects of changing to a different strategy. In the absence of such advanced metrics, the decision-making becomes even more uncertain. The underutilization of licensing outside technologies is linked to insufficient models of calculating the actual costs and benefits related to licensing. It is further amplified by the not-invented-here syndrome.