Sustainability of Patent-Based Competitive Advantage

Patents have been touted as being the type of resource which provides a basis for longer-lived competitive advantage, but as technological change accelerates, even patents have become questionable sources of sustainable competitive advantage. In settings where no sources of competitive advantage are sustainable for long, managers have sought respite in resources, in how to organize and coordinate their operating routines, in recruiting superior knowledge workers, developing keener learning capabilities and absorptive capacity, and in learning how to copy competitors’ sources of competitive advantage more nimbly. We find that the duration of patent-based advantage is limited, but that its duration is longer where firms have patented inventions which incorporate a broader range of technological knowledge not core to the grants described in their respective patent applications.