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LICENSING OF IPRs AND STRATEGIC INTENT Role of Firm, Industry and Technology Characteristics. Rakesh Basant. Role of IPRs. IPRs creates market for licensing Information asymmetry IP boundary Increase in licensing activity Convergence Complexity Munificence Costs - risk premium.
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LICENSING OF IPRs AND STRATEGIC INTENTRole of Firm, Industry and Technology Characteristics Rakesh Basant
Role of IPRs • IPRs creates market for licensing • Information asymmetry • IP boundary • Increase in licensing activity • Convergence • Complexity • Munificence • Costs - risk premium Rakesh Basant/IPlicense
Licensing - Key Decisions • Should one license? • If yes, • To whom? • What should be the terms and conditions of licensing? • Should it be bundled with other arrangements like JV, networking • Should it be bundled with other IP: Trademark-Patent linkages Rakesh Basant/IPlicense
Context - Firm, Industry & Technological Characteristics • Appropriability: Nature of IPR protection • Importance of complementary assets (CAs): Specialized (critical) v/s Generic • Market and technological uncertainty • Importance of enabling technologies • Stage of the technology/product life cycle (TLC/PLC) • Nature of competition (CAs, appropriability) • Network externalities: Role of standards • Implications for transaction costs Rakesh Basant/IPlicense
Firm Context - Strategic Role of Licensing • Access complementary assets & markets • Time to market, investment costs • Appropriability, advantage licensee/competitor • Licensing by public labs: accessing CAs? • Importance of 3Ps, tacit knowledge for licensee • Knowledge for patents v/s knowledge for manufacturing/marketing • Design freedom: cross-licensing of patent portfolios • Technology acquisition (Tacitness, 3Ps) Rakesh Basant/IPlicense
Strategic Role..... • Risk reduction vis-à-vis price, quality & supply disturbance • Credible commitment, demand creation (Brands, Patents) • Litigation resolution: overlapping IPRs/claims, cross-licensing • Leveraging IPRs for other negotiations: JVs, joint R&D • Creation of standards: Demand creation thru complementary products • Strategic deterrence: Influence competitors R&D portfolio Rakesh Basant/IPlicense
Strategic Role….. • Earning revenue from strategic misfits: product v/s patent portfolios • Expanding the scope of IP: licensing trademark across products (Dilution?) • Exploiting learning opportunities: licensing -- integration (JV?) • Specialized CAs, complexity, munificence • Sector specific learning curves (chemical process?) • Learning from the licensees ( TLC/PLC, contingency clause) Rakesh Basant/IPlicense
Insights into Terms of Licensing • Short terms v/s long term • TLC, uncertainty • Unilateral v/s cross-licensing • Munificence, complexity, TLC/PLC • Fixed fee v/s royalty • Uncertainty: slide-up scale, low fixed fee? • Royalty rates • TLC, uncertainty Rakesh Basant/IPlicense
Insights into Terms... • Sharing of improvements by licensors and licensees • Munificence, complexity, TLC/PLC, grant-back • Exclusivity: product/market/time • TLC/PLC, uncertainty, munificence • Sublicensing • TLC/PLC, uncertainty, munificence • Technical assistance • Complexity, tacitness, 3 Ps Rakesh Basant/IPlicense
Thank You Rakesh Basant/IPlicense