Proceedings of the 3rd European Conference on Intellectual Capital

Albrecht Fritzsche and Rebecca Geiger
Various studies, however, indicate that <strong>the</strong> relation between patenting, intellectual capital and competitive
advantage is actually much more complicated. Patents do not necessarily imply an advantage
on <strong>the</strong> market. The exclusively owned technology can relate to products on <strong>the</strong> market in many different
ways. Most <strong>of</strong> <strong>the</strong> times, a single patent is only relevant for a very specific part <strong>of</strong> a product or a
manufacturing process. O<strong>the</strong>r companies can <strong>the</strong>refore develop different solutions. In many cases, <strong>the</strong>
competitors own o<strong>the</strong>r patents which refer to o<strong>the</strong>r parts <strong>of</strong> a product, or <strong>the</strong>y may even pr<strong>of</strong>it from <strong>the</strong>
explication <strong>of</strong> <strong>the</strong> innovation in <strong>the</strong> patent catalogue for fur<strong>the</strong>r inventions (Levin et al. 1987, Harabi
1995, Sattler 2003). In such cases, o<strong>the</strong>r mechanisms <strong>of</strong> protection, for example shorter times to
market, <strong>the</strong> control <strong>of</strong> resources, complex designs or secrecy can be more effective and efficient than
patents (Levin et al. 1987, Harabi 1995, Sattler 2003, Hipp 2006). In addition, infringements are a
common phenomenon that causes significant problems for <strong>the</strong> owners <strong>of</strong> patents, making <strong>the</strong> effort for
patenting ra<strong>the</strong>r futile (see e.g. Feinberg/Rousslang (1990), Mansfield et al. (1981), Lerner (1995)).
Never<strong>the</strong>less, it remains a fact that <strong>the</strong> interest in patents is rising. In order to understand this phenomenon,
<strong>the</strong> patenting activities in <strong>the</strong> companies require fur<strong>the</strong>r attention.
2.2 Patenting practice
Many authors have recently studied <strong>the</strong> way how companies make practical use <strong>of</strong> patenting. Rahn
(1994) focuses on <strong>the</strong> patenting behaviour in Japan and emphasizes <strong>the</strong> similarities between fighting
for a competitive advantage and warfare. As a consequence, <strong>the</strong> author approaches <strong>the</strong> usage <strong>of</strong>
patents in terms <strong>of</strong> military strategy. Rahn argues from <strong>the</strong> perspective <strong>of</strong> a patent attorney and distinguishes
various different strategies to accomplish <strong>the</strong>se goals. Ernst (1995) studies patenting activities
in <strong>the</strong> German mechanical engineering industry and <strong>the</strong>ir relationship to company performance.
The paper distinguishes systematic patenting activities according to a general policy and selective
patenting <strong>of</strong> specific inventions and highlights <strong>the</strong> difference between national and international patenting.
Granstrand (1999) gives a complete overview <strong>of</strong> intellectual property management and its
economic impact, including an explication <strong>of</strong> different patenting policies and strategies that can be
applied in pursuing <strong>the</strong>m. These strategies mostly refer to <strong>the</strong> way how several patents can be combined
to have a stronger effect on <strong>the</strong> competition. Granstrand also discusses strategies to react to <strong>the</strong>
patenting activity <strong>of</strong> <strong>the</strong> competitors. Cohen et al. (2002) present <strong>the</strong> results <strong>of</strong> a comparative study
among American and Japanese companies about <strong>the</strong> different functions attributed to patenting. The
paper is mainly interested in showing <strong>the</strong> effects <strong>of</strong> patenting on <strong>the</strong> development and distribution <strong>of</strong>
knowledge in <strong>the</strong> industry. Shapiro (2001) studies how patents interfere with <strong>the</strong> innovative activities in
various high-tech industries and <strong>the</strong> licensing activities between different companies (on that topic see
also Burr 2004). Shapiro coins <strong>the</strong> term "patent thicket" to emphasise <strong>the</strong> problem that each product can
be affected by a multitude <strong>of</strong> patents from many o<strong>the</strong>r companies. As a consequence, co-operative
behaviour is necessary to avoid a complete deadlock <strong>of</strong> innovation in <strong>the</strong> industry. Burr et al. (2007)
provide ano<strong>the</strong>r overview <strong>of</strong> all aspects <strong>of</strong> patent management, distinguishing <strong>of</strong>fensive and defensive
as well as sporadic and comprehensive patenting activities and patent licensing.
3. A framework <strong>of</strong> patenting behaviour
3.1 Patents as instruments
The current state <strong>of</strong> research makes clear that it is necessary to distinguish patenting as an act from its
purpose. The registration <strong>of</strong> a patent is not identical to <strong>the</strong> protection <strong>of</strong> a product against competitors; it
is an <strong>of</strong>ficial claim <strong>of</strong> possession concerning an innovation which exerts a legal restriction on <strong>the</strong> potential
<strong>of</strong> o<strong>the</strong>rs to make use <strong>of</strong> this innovation. The protection <strong>of</strong> a product against competition is a
potential effect <strong>of</strong> this restriction. The extent <strong>of</strong> this protection depends on <strong>the</strong> relation between <strong>the</strong>
innovation and <strong>the</strong> product. If <strong>the</strong> innovation is strongly connected to <strong>the</strong> product, <strong>the</strong> patent can be an
effective instrument to protect it. However, it only makes sense to use <strong>the</strong> patent as an instrument for
that purpose if it is also efficient. If <strong>the</strong> costs for <strong>the</strong> registration and <strong>the</strong> enforcement <strong>of</strong> <strong>the</strong> patent are
too high, its protective effect is worthless. Never<strong>the</strong>less, it might still be useful to register <strong>the</strong> patent
because it also serves o<strong>the</strong>r purposes.
For a concise understanding <strong>of</strong> <strong>the</strong> way how companies make use <strong>of</strong> patenting, it is <strong>the</strong>refore necessary
to address <strong>the</strong> different dimensions <strong>of</strong> instrumental action, including <strong>the</strong> effectiveness <strong>of</strong> <strong>the</strong> instrument,
<strong>the</strong> purpose to which it is used and <strong>the</strong> conditions <strong>of</strong> application that define its efficiency. If this is done,
it becomes possible to review <strong>the</strong> outcome <strong>of</strong> <strong>the</strong> patenting activity with respect to its original intentions
and to draw conclusions about its success.
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