Session 10: Appropriation of innovation rents

Question 1

Appropriation strategies

Answer 1

Appropriability is the degree to which a firm is able to capture rents
from its innovations.

Question 2

Appropriation strategies

Answer 2

- Use in own products /
services
- Excluding others from
the use
- Direct profits from use
by others
- Indirect profits from
use by others (i.e.,
complementary
products)

Question 3

Cross-Licensing

Answer 3

firms cross-license large bundles of patents

Question 4

Patent sharks or patent trolls

Answer 4

• Firms with hidden IP that
  surface and sue, when their rights are inadvertently
  infringed. These trolls or sharks don’t manufacture
  anything themselves. Thus, they do not violate any IP
  rights of others.

Question 5

Patent sharks or patent trolls - What companies and managers can do:

Answer 5

• Slim down their patent portfolios
• develop smarter, simpler technical standards and
  design more-modular components

Question 6

Free Revealing

Answer 6

• When diffusion is very advantageous and licensing difficult, free
  revealing of the invention may be the best option.
• OSS