INTELLECTUAL PROPERTY AND COMPETITITVE ADVANTAGE Rakesh Basant.

INTELLECTUAL PROPERTY AND COMPETITITVE

ADVANTAGE

Rakesh Basant

Rakesh Basant/IPadavntage 2

Strategic Question

How to leverage IP to reduce costs, increase profitability and market share vis-à-vis your competitors?

To analyze this question, focus on

Conceptual building blocks for analysis

Key strategic issues for building competitiveness with IP

Firm perspective but implications for research labs, public/private


Expected Learning Points

Ownership of IP may be a necessary but not a sufficient condition for competitive advantage

IP needs to be seen in a larger context of corporate and technology strategies to derive maximum value

Importance of cross-functional groups to develop and commercialize IP

Broad framework for understanding the role of IP in enhancing competitiveness


Building Blocks

Intellectual property (IP) v/s Intellectual assets (IA)

Not all innovations are protected and all IP commercialized

Technology, an important element of intellectual assets

Knowledge embodied in product, process and practices

Codified v/s tacit knowledge


Building Blocks…..

Appropriability: Ability to appropriate benefits arising from IA

Perfect appropriability a misnomer

Technology imitation possibilities: complexity, cumulativeness, circumstantial specificity and tacitness

Practices tacit/cumulative - difficult to imitate

Sector specificity: chemicals v/s engineering, life cycle

IPR regime: laws and their implementation



Product-Process-Practice linkages

Conventional technology/product life cycle (T/PLC) approach v/s simultaneous attention on product and process: sector specificity, T/PLC duration?

Issue of standards, design freedom (sector specific)

Breakthrough, platform, derivative projects



Complementary Assets Required for Commercialization of IP

Complementary technologies

Manufacturing, Marketing, Distribution, After sales support

Customer relationships

Complementary intellectual property: Patents, trade secrets & brands?

Generic v/s Specialized:Irreversibility, commitment, contracting difficulties, lock-in


Key Strategic Issues for Competitive Advantage

How to access complementary assets?The case of CAT scanner: EMI, GE, Johnson &

Johnson

Role of various appropriability regimes, asset specificity etc

How to leverage the linkages between the 3Ps?Get the linkages right, unbundle to learn and develop

capabilities

Avoid over the wall syndrome, participation of manufacturing in design process


Key Strategic Issues…..

How to leverage the linkages between the 3Ps...

Process development as an integral part of the product development process to become competitive Lower manufacturing costsAccelerated time to market, lead timesRapid ramp-up Faster introduction of new products



Process development as an integral part of the product development process…..Enhanced product functionality and customer

acceptanceExtended proprietary position: appropriability

improves, process imitation more difficult and practice most difficult?

Issues of quality, delivery times, defect rates etc.

Role of process-practice interface



The need of linking the three Ps is very real becauseProduct Life Cycles are becoming shorterHard to manufacture product designsFragmented demanding marketsHigh costs of development

Implications for public sector labs?Public-private partnership?


Key Strategic Issues…..How to leverage the links among various

IPRs?Complementary IP on new

features/process/designsPatent thicketsPatents/copyrights for software and trade

dress for interface?Combine trade secrets with patents and

trademarks Munificence of patented technology: strategic

use for different products/sectors


Key Strategic Issues…..How to produce a design that is closer to

the customer?Over the wall syndrome: R&D-Manufacturing-

Marketing

How to exploit the relevance of tacit knowledge?Links between codified & tacit knowledge: the

3 Ps, appropriabilityManagement of tacit knowledge critical:

organizational practices to diffuse (share) - incentives, labour turnover


Thank You

INTELLECTUAL PROPERTY AND COMPETITITVE ADVANTAGE Rakesh Basant.

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