Technological competition and patent strategy: Protecting innovation, preempting rivals and defending the freedom to operate

Riccardo Cappelli, Marco Corsino, Keld Laursen, Salvatore Torrisi

Research Policy · 2023 · Volume 52 · Issue 6

DOI: 10.1016/j.respol.2023.104785

Abstract

Drawing on the resource-based view of the firm, we examine the effect of technological competition over a patent on the firm's choice of patenting strategy. We claim that technological competition makes the traditional strategy of protecting focal innovations from imitation less likely and increases the likelihood of a play strategy — i.e. using patents to avoid the risk of hold-up by other patent owners, or as a bargaining chip in litigation and cross-licensing. However, we claim also that technological competition over a target close to the firm's core technology should lead to use of a fence strategy i.e. to blocking the commercial endeavors of rivals and preempting substitute inventions. We find support for our hypotheses using data from a large-scale survey of European patent applications.

Keywords

Intellectual property management, Appropriability, Patent strategy, Technological competition

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