Proceedings of the 3rd European Conference on Intellectual Capital

The Strategies and Tactics <strong>of</strong> Patent Management and Their
Importance for Competitive Advantage
Albrecht Fritzsche 1 and Rebecca Geiger 2
1
Institute for Philosophy, TU Darmstadt, Germany
2
International Performance Research Institute gemeinnützige GmbH, Germany
a.m.fritzsche@gmx.net
rgeiger@ipri-institute.com
Abstract: In order to gain a better understanding <strong>of</strong> patenting activities, it is necessary to overcome <strong>the</strong> simplifications
<strong>of</strong> identifying a patent with a competitive advantage. Companies use patenting in many different ways for
different purposes. Based on <strong>the</strong> subsequent steps <strong>of</strong> rational problem solving, it is possible to establish a
framework <strong>of</strong> patent management that distinguishes <strong>the</strong> strategies <strong>of</strong> patenting and <strong>the</strong> tactical moves that are be
applied to pursue <strong>the</strong>m. Based on <strong>the</strong> review <strong>of</strong> current literature, four strategies and eleven tactical moves can be
identified. The distinction between strategies and tactics makes it easier to describe <strong>the</strong> role <strong>of</strong> patenting in <strong>the</strong>
knowledge society and <strong>the</strong> emerging market for intellectual property in <strong>the</strong> high tech industry. In particular, <strong>the</strong>
reference to <strong>the</strong> tactical moves in which companies make use <strong>of</strong> <strong>the</strong>ir patents can improve <strong>the</strong> methods to assess
<strong>the</strong> value that patents have for <strong>the</strong>ir owners.
Keywords: intellectual capital, intellectual property, procedurals in patent management, strategic and tactical
aspects <strong>of</strong> patent management
1. Introduction
In <strong>the</strong> last two decades, <strong>the</strong> annual number <strong>of</strong> patent registrations has tripled. This development has
proceeded similarly in all big industrial countries. While <strong>the</strong> sudden growth <strong>of</strong> patent registrations in <strong>the</strong>
mid-eighties in <strong>the</strong> United States <strong>of</strong> America can be explained by changes in <strong>the</strong> legislation that made
registrations easier (see e.g. Thurows 1997), <strong>the</strong> continuous augmentation throughout <strong>the</strong> last years is
an expression <strong>of</strong> a more fundamental economic development. Companies make more use <strong>of</strong> patents
than ever before and <strong>the</strong>y do so in ways that have until recently not been reflected in academic research.
Patents represent a considerable part <strong>of</strong> <strong>the</strong> documented technological knowledge in <strong>the</strong> world, which
includes <strong>the</strong> current state <strong>of</strong> <strong>the</strong> art. They also indicate new directions and trends in technological development;
various studies have shown that <strong>the</strong>re is a strong connection between intellectual property
rights and innovative power (Harh<strong>of</strong>f 2006, Kanwar/Evenson 2003, Hall 2007, Qian 2006, Frietsch et al.
2010). By patent management a company can both benchmark its R&D contributions with respect to its
competitors and realize competitive strategies in technological development.
Recent publications on <strong>the</strong> topic <strong>of</strong> patent management draw a detailed picture <strong>of</strong> <strong>the</strong> patenting activity
in different countries and industries. They also make clear that <strong>the</strong> motivation to register patents varies
quite a lot between different companies. So far, however, it has remained most unclear how this behaviour
should be administered and evaluated for its success. This paper suggests a framework that
allows a systematic approach to patenting in terms <strong>of</strong> rational problem solving.
2. Dimensions <strong>of</strong> patent management
2.1 Patents and intellectual capital
The term intellectual capital subsumes a variety <strong>of</strong> different intangible assets, including human capital,
structural capital, and relational capital (Sullivan 2000, Stewart 1997, Sveiby 1997, Maddocks/Beaney
2002, Edvinsson/Malone 1997, Skyrme 1998). Intellectual capital affects economic operations in many
different ways. For example, human capital – and to some extent also structural and relational capital –
determine <strong>the</strong> potential <strong>of</strong> a company for technical innovation. Patents, trademarks, design rights and
utility models are legal means to secure exclusive access to an innovation. With <strong>the</strong> existence <strong>of</strong> <strong>the</strong>se
rights, <strong>the</strong> innovation turns into property. Patents enable a company to exploit it without having to share
it with <strong>the</strong> competition. In models <strong>of</strong> market dynamics, <strong>the</strong> economic effect <strong>of</strong> patents is usually described
as a temporary monopoly that allows <strong>the</strong> company to setup higher prices; making innovative
activity more pr<strong>of</strong>itable (see Arrow 1962, Nordhaus 1969). In that sense, patents are one way for a
company to get a pay<strong>of</strong>f from <strong>the</strong>ir intellectual capital.
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