Session 260

IPRs, Appropriability and Innovation

Track I

Date: Monday, September 22, 2014

Track X

Time: 08:00 – 09:15

Common Ground

Room: Estocolmo


  • Alfonso Gambardella, Bocconi University

Title: How Does Uncertainty About IPR Protection Affect Venture Capital Investment? Evidence from Inevitable Disclosure Doctrine


  • Carlos Kemeny, Lisbon Catholic School of Business and Economics
  • Raffaele Conti, Catholic University of Portugal
  • Francesco Castellaneta, Lisbon Catholic School of Business and Economics
  • Francisco Veloso, Lisbon Catholic School of Business and Economics

Abstract: This study investigates how inevitable disclosure, a form of intellectual property rights (IPR) protection, affects venture capital investment. A ruling on inevitable disclosure might solve two types of uncertainty about IPR protection, mobility and regulatory uncertainty, which relate, respectively, to the risk of knowledge leakage due to employee mobility and the predictability of court decisions if this risk comes true. Either of these types might prevent venture capitalists from investing in a state. Using a sample of 91,416 venture capital deals across the U.S., we find that a rule in favor of inevitable disclosure increases the amount of venture capital inflows and the proportion of investment by non-local venture capitalists more than a rule against, a mixed rule or no rule on inevitable disclosure.

Title: Intellectual Property Rights and Research on Neglected Diseases


  • Keyvan Vakili, London Business School
  • Anita McGahan, University of Toronto

Abstract: Prior research suggests that TRIPS, a policy that requires WTO members to implement IP rights, has not stimulated significant drug development on neglected diseases in low income countries. One potential explanation is that the investment must arise in basic science before drugs enter into clinical trials. Taking advantage of the variation across countries in the timing of TRIPS compliance, we examine the impact of TRIPS on the level of research on neglected and global diseases. We find that the introduction of TRIPS has a significant positive impact on the amount of research on both global and neglected diseases. We also find that the effect on research on neglected diseases is much more pronounced in low income countries where such diseases are more prevalent.

Title: Patent Litigation as a Means of Post-Entry Retaliation


  • Theresa Veer, University of Tuebingen

Abstract: In this article I investigate the response of incumbents towards the entry of new market participants in terms of triggered patent litigation. I develop a theoretical framework based on the literature on market entry and exit and literature on IP strategy to predict incumbents’ tendency to litigate new market participants for patent infringement.
In the setting of the semiconductor industry, I analyze patent litigation as a reaction to market entry. In doing so, I set out to inform the literature on market dynamics by analyzing a new post entry retaliation measure. Further, my findings contribute to the emerging body of research on IP strategy. Concluding, my results have implications on competition policies and management implications for strategic market entry and competitive advantage of incumbents.

Title: Patent Regime Shift and Firms’ Strategic Behavior in Innovation: Evidence from a Natural Experiment


  • Wenlong He, Peking University

Abstract: In this paper, we exploit the second amendment to China’s patent law in 2000 to examine how the policy change causes a change in the patenting strategy of listed state-owned enterprises (SOEs) versus non-SOEs. Using a difference-in-differences design, we show that following the patent regime shift, while SOEs experienced a substantial increase in their patent applications for minor innovations, their applications for major innovations didn’t see a significant rise. More importantly, we find a significant decline of SOEs’ patent quality after the policy change. However, such a patent quality decline is elevated for SOEs in monopoly industries and reduced for SOEs in high-tech industries, suggesting that competitive and innovative pressures mitigate some of the unintended negative consequences of the patent law reform for firm patenting.

Title: The Role of Deep Hierarchies in Innovation


  • Sridhar Seshadri, University of Texas-Austin
  • Zur Shapira, New York University
  • Christopher Tucci, Ecole Polytechnique Federale de Lausanne

Abstract: We discuss a formal model of idea flows and project / idea combination in companies and how hierarchies might influence those combinations. We then use the results of the model to generate hypotheses about the importance and variance of importance of ideas. Then we test the hypotheses based on an analysis of patents for 544 firms surveyed between 1981 and 1985. We find that indeed, even after controlling for size, span of control, and other important variables, firms with deeper hierarchies tended to have a more “important” patent. We conclude the paper with a discussion of the implications of these results for organization theory and learning.

Title: Too Small to Patent?: How Applicant Status and Examiner Workload Influence Intellectual Property Rights Allocation


  • Daniel Chaffin, University of Nebraska-Kearney
  • Ralph Heidl, University of Oregon
  • Robert Wiseman, Michigan State University
  • Mukund Chari, University of Washington

Abstract: Innovation is argued to be a fundamental mechanism of economic growth and performance within firms (Schumpeter, 1961). Recently scholars have begun to raise concerns about the rate of innovation within the US suggesting that the rate of path breaking innovation is declining over time (Christensen, 2012; Gordon, 2012). While path breaking innovation may be declining, what is unclear is what may be influencing the decline in innovation (Economist, 2013). We argue that declining path breaking innovations are the result of inefficiencies in the intellectual property (IP) market. Specifically we suggest that inefficiencies in the allocation of IP rights by the United States Patent Trade Office inhibits path-breaking innovations by constraining the ability of new market entrants to appropriate the rents from their innovation.

All Sessions in Track I...

Sun: 08:00 – 09:15
Session 278: Routines: Theoretical and Empirical Advancements and Avenues for Future Research
Sun: 09:30 – 10:45
Session 463: Big Data: Revolutionizing Innovation and Competition
Sun: 11:15 – 12:30
Session 464: Foundations Session: A conversation with Michael Tushman on Leadership, Innovation and Strategic Change
Sun: 15:45 – 17:00
Session 270: Innovation in MNCs and Global Networks
Session 275: Open Innovation: Outcomes and antecedents
Sun: 17:15 – 18:30
Session 605: Knowledge and Innovation IG Business Meeting
Mon: 08:00 – 09:15
Session 260: IPRs, Appropriability and Innovation
Session 274: Incumbents, Radical Innovations and Disruptive Technologies
Mon: 11:00 – 12:15
Session 276: Organizational Learning
Session 277: Learning From Others
Session 372: The Challenges of Global Operations: Managing R&D and Complexity
Session 423: Alliances and Innovation Performance
Mon: 14:45 – 16:00
Session 265: Learning, Search, Slack: The behavioral theory revisited
Session 269: Knowledge Flows: Transfer, sharing and replication
Mon: 16:30 – 17:45
Session 254: Conversations about Knowledge
Session 257: Spin offs, Venture Capital and Entrepreneurship
Tue: 08:00 – 09:15
Session 259: Institutionalizing Innovation: Norms, status and legitimacy issues
Session 273: From Internal Resources to Customer Needs
Session 383: Globalization of R&D: Implications for Learning and Innovation
Tue: 11:00 – 12:15
Session 267: The Role of Individuals in Innovation
Session 272: Research and Development: Antecedents and outcomes
Session 361: Creativity and Innovation
Session 469: M&As and Innovation
Tue: 15:30 – 16:45
Session 262: Networks of Innovators
Session 263: Innovation Models in Emerging Economies
Tue: 17:15 – 18:30
Session 255: Exploration and Exploitation
Session 256: Organizing for Open Innovation
Session 261: Practices and Processes for Innovation

All Sessions in Track X...

Sun: 13:45 – 14:30
Session 295: Keynote: Lifetime Achievement Award
Sun: 14:30 – 15:15
Session 471: Keynote: CK Prahalad Award
Sun: 15:45 – 17:00
Session 203: Acquisition Implementation
Session 215: Yikes: What Now (Reloaded)?: Firm Responses to Stakeholder Activism
Session 398: Corporate Strategy and Corporate Finance: Continuing the Research Conversation
Mon: 08:00 – 09:15
Session 260: IPRs, Appropriability and Innovation
Session 338: Making Strategy, Strategic Change and the Role of Sensemaking and Sensegiving
Mon: 09:30 – 10:30
Session 296: How Social Networks Create Competitive Advantage: The Microfoundations Reputation
Mon: 11:00 – 12:15
Session 213: What is In It For Us? How Sustainability Matters for Firm Strategy
Session 352: CEO Decision Making
Session 405: Multi-Sided Platform Strategies
Mon: 13:30 – 14:30
Session 4: Business Models in their Competitive Context
Session 5: Building Strategic States
Session 298: Using Networks to Shape Strategy
Session 299: Dealing with the Euro Area Economic Crisis: Strategic Adjustment in the Period of Turmoil
Session 300: Methodological and Conceptual Frontiers in the New World of Networks
Mon: 14:45 – 16:00
Session 368: Firm Scope and Industry Competition
Session 375: Changing External Environments: How do Multinationals Respond?
Mon: 16:30 – 17:45
Session 245: Human Capital Complementarities
Session 344: Paradoxical Tensions and Innovative Strategies
Tue: 08:00 – 09:15
Session 409: Increasing the Relevance of Strategy Research
Session 446: Empirical Studies and Case Studies of Business Models
Tue: 09:30 – 10:30
Session 297: Granularity of Profit
Tue: 11:00 – 12:15
Session 469: M&As and Innovation
Tue: 14:15 – 15:15
Session 301: Strategy Frameworks: In Quest of Relevance in a Turbulent World
Session 302: Directing Strategy: The Process Challenges of Formulating and Implementing Strategy in a World of Networks
Session 470: Governance Challenges in Globalized Networks
Session 473: Rethinking the Architecture of Global Corporations
Tue: 15:30 – 16:45
Session 208: Interactions, Recombination and Adaptation Processes
Session 346: Management and Strategy Practices Reconsidered
Tue: 17:15 – 18:30
Session 441: Funding Entrepreneurial Ventures: Sources and Successes

Strategic Management Society