Managing intellectual property: Strategies for patent holders

Too often, firms depend on the traditional strategies of exercising market power, while alternative strategies could create greater value. Researchers concentrate mostly on offensive and defensive patent strategies, which is associated with two issues. Firstly, little attention is devoted to leveraging strategies. Secondly, the literature on leveraging strategies and external patent commercialisation is dispersed, and there is little coverage of the strategic choices left to managers in IP-rich industries. This article fills that gap, as it aims to provide a guide on strategies for patent holders with emphasis on various forms of cooperation. The paper analyses various forms of cooperation: sale, licensing and cross-licensing, patent-pooling, cooperation (alliances and joint-ventures), donation of patent rights and abandoning them, as well as deterring competitors from litigation (mutual hold up) from the point of view of the patent owner. By highlighting the strategies' pros and cons, as well as examples of their introduction, this article provides a framework of strategic choices left for managers.