Intellectual property Strategy - the role of intellectual property in strategy evolution - an early draft of a potential book

1. Chapter
Intellectual Property
Strategy
Introduction: The New Front of Business Strategy
Most people know the legal artefacts of intellectual property, patents, trademarks, registered
designs and copyright, but have little idea about what constitutes intellectual property within
a firm and it’s value as a tool of strategy. Intellectual property is a wide concept, much more
than a method to develop monopolistic right of use, it includes the very nature of ideas that
the business has built its foundation upon, the purpose of products and services, the
processes that create them, the way they are disseminated into the marketplace and the
ways that this is done. Intellectual property is at the heart of the firm’s competitive ability to
exist and will decide it’s position of competitive advantage in the future. Intellectual property
is the core of the firm’s ability to sustain and survive.
International intellectual property activity is undergoing steady growth and there are a
number of new trends emerging. Examining the growth of patent applications can provide
some indication of the importance of intellectual property to product development and
strategy in the business world. Firstly, the overall aggregate growth of patent filings has
averaged a 4.75% per annum over the last two decades according to the World International
Intellectual Property Organisation (WIPO), from 884,400 filings per annum in 1985 to
1,599,000 filings per annum in 20041. Figure 9.1. shows aggregate international level of
patent filings by year, up to 2004.
Figure 9.1. Worldwide Patent Filings
Non-Resident Filed Applications
1600000 Resident Filed Applications
Patent Applications Filed
1400000
1200000
1000000
800000
600000
400000
200000
0
1987
1989
1991
1992
1993
1994
1996
1998
2000
2002
2003
1985
1986
1988
1990
1995
1997
1999
2001
2004
Source: WIPO Statistics

2. The figures show that most of the increase in patent filing activity is by non-residents filing in
other jurisdictions, which is increasing at the rate of 7.4% per annum. The significance of this
is that it is an indicator of the spread of firm internationalisation in their expansion strategies.
Figure 9.2. shows from which countries the majority of patent filing activity is coming from,
where the top 5 countries, Japan, USA, Republic of Korea, China and the European Union are
receiving 75% of all patent filings undertaken worldwide. This roughly equates with the
relative importance of these markets to the World economy, except for the Republic of Korea,
which as a single market is relatively small in World importance.
Figure 9.2. Twenty Largest Patent Filing Countries 2004
Poland
Italy
Argentina
Singapore
Hong Kong (SAR)
Norw ay
Mexico
France
India
Brazil
United Kingdom
Russian Federation
Australia
Canada
Germ any
European Patent Office
China
Korea, Rep.
USA
Japan
0 50000 100000 150000 200000 250000 300000 350000 400000 450000
Number of Patent Filings
Resident Patent File Applications
Source: WIPO Statistics Non-Resident Patent File Applications
As a rough indicator of the level of innovation within particular countries is a comparison of
the number of resident patents filed per Million population in each country. Japan and the
Republic of Korea have the highest rates of resident patent applications per Million
population. The World average is 148 per Million population for those countries where
statistics are available. Figure 9.3. shows a country ranking compared to the World average,
highlighted by an arrow.
Focusing on the Asia-Pacific region Figure 9.4. shows the number of resident international
patent in the region in 2006. International patent filings are more relevant than domestic
patent filings as the international filings figures are a better indicator of the countries
international influence in the global business arena. Countries like Japan, Republic of Korea,
China and Australia are far in front of the rest of the Asia-Pacific region. In the Asian
grouping India had 627 international patent filings during 2006 and Singapore 402. Both
countries have invested in R&D very heavily, with India expected to become an industrial
giant in the near future and Singapore publicly emulating the Korean Research model in
cluster development, in large investments like the biotechnology Biopolis2. Although
aggregate filings are low in the rest of the Asian region, Malaysia stands out with some
relative success with its National Policies on projects such as the Multimedia Super Corridor
(MSC) in generating new patent filings, notwithstanding the criticisms levelled at such
projects by media and industry commentators3. The Asian region, all would agree, still has a
long way to go, however issues like innovation and research and development
commercialisation are on the top of policy agendas in these countries at this time4.

3. Figure 9.3. Number of Resient Patent Filings per Million Population 2004
M exic o 5
India 7
Turkey 7
Thailand 11
B razil 21
A rgentina 28
B eligium 50
C hina 51
C zec h R epublic 61
P o land 62
S pain 67
Hungary 75
Ukraine 86
B elarus 108
Italy 111
C anada 125
Netherlands 134
S ingapo re 147
Wo rld A verage 148 World Average
R us s ian 160
S witzerland 217
Is rael 227
F ranc e 236
A us tria 275
S weden 308
UK 320
No rway 335
D enmark 347
F inland 385
New Z ealand 402
A us tralia 479
G ermany 587
US A 645
Ko rea, R ep. 2189 2884
J apan
0 500 1000 1500 2000 2500 3000
Number of Resident Patent Filings/Million Population 2004
Source: WIPO Statistics
Figure 9.4. International Patents Filed by Residents in Asia-Pacific
Region 2006
Vietnam 9
12
Thailand
Singapore 402
15
Philippines
New Zealand 316
54
Malaysia
5935
Republic Korea
4
Dem. Rep Korea
26906
Japan
India 627
6
Indonesia
3910
China
1
Brunei Darussalam
2139
Australia
0 5000 10000 15000 20000 25000 30000
Number of International Patents Filed by Residents
Source: WIPO Statistices
An important measure of productivity and efficiency in research, development and potential
commercialisation (as the figures don’t tell us how many patents are actually
commercialised), is the rate of patent filings per USD Million spent on R&D. Figure 9.5. shows
the number of resident patents filed per USD Million spent on National R&D.

4. Figure 9.5. Resident Patent Filings per USD 1.0 Million R&D
Expenditure
0.08
Belgium 0.14
Turkey 0.21
Mexico 0.23
Israel 0.23
Canada 0.23
India 0.26
Netherlands 0.27
Spain 0.28
Czech Republic 0.29
Sw eden 0.29
Sw itzerland 0.3
Brazil 0.37
Italy 0.41
France 0.41
Finland 0.43
Austria 0.46
Denm ark 0.51
Thailand 0.54
Hungary 0.56
Norw ay 0.61
Argentina 0.62
UK 0.71
USA 0.78
China 0.81
World Average 0.92
Germ any 0.99
Poland 1.13
Australia 1.18
Singapore 1.46
Russian 1.5
Ukraine 1.67
New Zealand 3.15
Belarus 3.49
Japan 4.6
Korea, Rep.
0 1 2 3 4 5
Number of Resident Patent Filings per USD 1 Million R&D Expenditure
Source: WIPO Statistics
Both the Republic of Korea and Japan have very high rates of patent applications per USD
Million spent on research and development expenditure. Again as is the case of patent filings
per Million population, most countries above the world average are industrialised and
emerging countries. It is almost impossible to generalise the reasons for the ranking position
of each country as each country has their own unique research and development models and
cultural approaches to the development of intellectual property, which proves successful to
them. Ironically, some countries like Singapore that emulated some of the European and
faired better. Other countries like the Russian Federation, Ukraine and Belarus have come out
of the Communist block and manage to produce above average intellectual property outputs
relative to the research dollars put in. Japan has its own well known model of nexus between
government, research institutions, universities, financial institutions and business5, which
produces high outputs. Other commentators would disagree about the success of the model
and claim high patent application is an integral part of Japanese business strategy6.
Turning to the technology categories where patent applications are filed provides some
indication about the nature of the World’s industry mix and where money is being spent on
research and development. Figure 9.6. shows the major categories of technology where
patent applications are filed. An important additional piece of information is the rate of
growth in terms of patent applications to provide some indication of the activity within each
category. Semiconductors, information technology, pharmaceuticals and cosmetics are the
largest groups of growth. Surprisingly, biotechnology over the last five years has displayed
negative growth from 9,001 applications filed in 2002 down to 6,952 applications filed in
2006. As these figures are based on the accepted international patent classifications, it is
possible that biotechnology patents tend to be filed under their potential applications, i.e.,
pharmaceuticals and cosmetics, etc. Conversely, this could indicate a trend toward
maintaining proprietary knowledge within the firms choosing to develop new intellectual
property and maintain maximum secrecy about processes from their competitors.

5. Figure 9.6. Major Categories of International Patent Applications 2006
Consumer Goods & Civil Engineering,
Building, Mining Other
Transport Equipment
2% 1% Electrical devices &
3% 5%
electrical engineering
Mechanical Components 6%
3%
Machine Tools, Engines, Audio-Visual
Thermal Process 4%
5%
Telecommunications
Materials Processing, 8%
Textiles & Paper
3% Information Technology
8%
Industrial Processes,
Handling & Printing Semiconductors
7% 3%
Agriculture and Food
Processing Optics
2% 2%
Pharmaceuticals &
Cosmetics Analysis & Medical
Biotechnology Organic,
8% Technology
4% Material & Surface Macromolecular &
13%
Technology Chemical Engineering Polymer Chemistry
Source: WIPO Statistics
5% 2% 7%
Further, short technology lifecycles in the biotechnology arena due to exponential growth in
discoveries may also discourage patent applications.
Figure 9.7. Main Areas of Patent Filing Growth 2006
28%
30%
22%
25%
21%
17%
16%
20%
15%
13%
11%
13%
13%
13%
12%
12%
11%
15%
11%
Percentage Growth (%)
8%
9%
8%
8%
10%
5%
0%
-5%
-5%
Optics
Organic,
Biotechnology
Mechanical
Audio-Visual
Chemical
Industrial
Civil Engineering,
Information
Agriculture and Food
Machine Tools,
Transport
Electrical devices &
Semiconductors
Analysis & Medical
Materials
Pharmaceuticals &
Consumer Goods &
Telecommunications
Material & Surface
Source: WIPO Statistics

6. Growth figures in Figure 9.7. can be misleading in areas of agriculture and food where
agricultural food and processing machinery patent applications is stagnant and actually
showed a 3% decline in applications between 2005 and 2006. However agriculture
applications and food technology is consistently increasing at a rate of 17% per annum,
showing the focus of the industry over the last half decade. Within the analytical instruments
category, laboratory instruments are showing around 7% growth per annum, but imaging
technology in the medical field is showing 15% growth and is becoming the largest area of
category development. Within the organic, macromolecular chemistry and polymer category,
fine chemicals are showing almost no growth, while polymers are growing at 19% per
annum.
Who are the people and organisations filing patents? This varies according to the technology
area and country. For example in the area of pharmaceuticals and cosmetics most applicants
are the companies involved in the industry. Very few patent applications would come from
individual inventors, research institutions or universities. However very generally across all
categories and countries large corporations would be responsible for approximately 25% of
all applications, followed by medium to large companies making another 30% of all
applications. Universities and research institutes would be responsible for 15% of
applications, small to medium companies specialising in an industry another 15% of
applications and individual inventors filing the balance 15% of patent applications. At this
point it is worth mentioning that only a very small percentage of patents filed are actually
commercialised and also a large number of patents filed are also allowed to lapse before they
are examined and approved by the patents office. Sometimes this is done for a reason, which
be discussed later in this chapter.
Before moving on into a more detailed discussion of intellectual property strategy it is worth
summarising the trends the statistics shown are indicating;
• The aggregate growth in patent filings has generally been in line with world
economic growth however some technology sectors like semiconductors, information
technology and pharmaceuticals are showing much higher than world economic
growth. This indicates that some emerging industries are taking on much more
importance in the world economy than before and most of them are technologically
relatively new fields of research and development and it will be sometime before
they become mature industries.
• There is growing internationalisation of patent filing in jurisdictions outside applicant
resident countries especially through the Patent Cooperation Treaty (PCT) system
indicating that patent applicants view the potential for their inventions on a multi-
market or global basis, rather than their own domestic markets. This indicates a
much more global orientation towards markets and business in the last few decades
is being taken.
• There is a rapid growth in patent applications from the East Asian region which
indicates the emergence and growing importance of the region in global business
and innovation.
• Some countries perform better per-capita and per amount of R&D funds spent than
other countries indicating that different countries have developed different levels of
innovation and research efficiency, and
• Finally, intellectual property is an important part of corporate strategy.
A number of other issues regarding intellectual property are also putting great influence upon
business strategy. Today, market leadership within an industry can be short lived if a
company does not continue to invest in new technology. The Disktronics factory in Melbourne
Australia during the 1980s was the only factory in the Southern Hemisphere that could
produce compact discs. The company had a USD 10 Million investment in the technology only
to find within a few years that compact discs reproduction technology could be undertaken
with equipment at a fraction of the cost with personal computers having the same ability to

7. burn disks by the 1990’s. Likewise, the telegram industry has almost faded out around the
world with the advent of a number of alternative communication technologies. The continued
emergence of new technology is one of the primary drivers of new opportunity where
exploitation leads to the creation of new markets and even new industries. This infers the
need by business to spend large resources on research and development to convert new
technology advances into new products.
Rapid technology advances increases the risk of investing in new technology as there is a
potential that the technology may become superseded before the investment can be
recovered. This places the long term survival of the firm into question in today’s business
environment, where large investments have been made in specific technologies and
strategies. The replacement of existing technologies is happening so fast that 40% of the
Fortune 500 companies that existed in 1975 do not exist today7. Now, on average new
products launched in the last five years make up 33% of most successful companies profits8.
In some industries, mobile phones, televisions, white goods and automobiles, etc this figure
is 100%. The cost of new technology is a powerful driver for firms to expand product
distribution over a large number of international markets to recover investment costs quicker.
New technologies are thus a push factor for the globalisation of companies due to the need
to obtain greater economies of scale, hence the need to protect technology through the
international intellectual property system is a very important corporate issue.
Rapid technology advances not only increase risk as discussed above but have created a
situation where a single firm cannot keep up with all advances in the industry. This has
provided new opportunities for small specialised firms to develop specific technologies as we
see in the information technology and biotechnology industries. New forms of strategic
alliances are being created with a number of companies involved with universities and
research institutions where the benefits of the new technology development is being shared
among a number of organisations and individuals. Consequently the role of intellectual
property is becoming valuable as a means of division and means of exchange as an
instrument in commercial transactions based on licensing agreements. Intellectual property
has become a tradable item of packaged technology in patents, trademarks and copyright to
enable other companies to benefit from them. Intellectual property in the information
technology industry is now a product in its own right, forming part of a whole product sold to
the consumer. Intellectual property is a source of revenue and a market strategy for its
developers. On your PC you will most likely have the trademarks and products of Microsoft,
Adobe and Norton. This has led to the development of intellectual property portfolios where a
collection of patents, trademarks and copyright is held for the purpose of gaining revenue
through licensing.
This trend has given rise to a new industry of legal enforcement where individuals and
companies, termed as ‘patent trolls’ seek out patent infringers for the purpose of enforcing
patent rights and seeking damages or licence fees9. The expansion of intellectual property
rights is being used by corporations to gain competitive advantage through monopolising
certain pieces of science, technology and even everyday language for their exclusive use. In
the opinion of Michael Perelman intellectual property rights have gone far beyond protection
for useful inventions and copyrights for music and literature10. A number of absurdities have
occurred in the US patent system have occurred where overzealous companies and attorneys
have attempted to enforce rights far beyond the original intentions of intellectual property
legislation and create right monopolies on everyday words and phrases. For example, the
American Society of Composers, Authors and Publishers (ASCAP) tried to sue the American
girl scouts for signing ‘Row, Row, Row Your Boat’ around campfires until there was a public
backlash11. The American National Basketball Association (NBA) launched a suit against
America Online (AOL) over the publishing of game scores and statistics on its website12. A
person managed to patent the correct way to lift a box13. Ralph Lauren won a case in the
appeals court in 2000 against US Polo Association for using the word ‘Polo’ as its magazine
name14. The Australian Institute of Management (AIM) was asked to change the name of a
20 year old training course called ‘Effective Negotiation Skills’ on their website because a US

8. training group Karras had a US trademark over the terms ‘Effective Negotiating’ , ‘Advanced
Effective Negotiating’ and ‘Effective Sales Negotiating’15 People have been able to gain
patents for colours and specific numbers16 and the courts have even dismissed a claim from a
patient whose doctor without the patient’s knowledge patented genetic material from his
body17.
A little more than a decade ago searching patent databases involved the physical travelling to
patent offices and searching microfilm or employing a patent attorney to undertake the
search for a fee. Over the last decade most patent offices have begun to provide online
access to their databases. At first many of these databases were restricted and not
particularly user friendly, however these search systems are being overhauled and updated to
make access and search protocols very easy. Just recently Google launched its patent search
product on its website which provides search access for full texts of US patents online.
The now easy access to intellectual property databases online provides much quicker
dissemination of science and technology around the world. Certainly this trend is of benefit to
scientists and inventors of developing countries in the Asian region as information that once
took many months to obtain is now online. There is likely to be effects from the ease of
access of intellectual property information online. Firstly, there will be a speed up of the
process of inventing around patents where inventions such as new chemical compounds are
either reengineered along a different route to ‘go around’ or break the existing patent, thus
leading to shorter protection times for existing inventors. Secondly there is likely to be an
increase in challenges to existing patents based on prior knowledge by other inventors.
The General Intellectual Property Structure: What is What in IP
Traditionally companies have been managed in terms of their physical assets and still to a
great degree companies in the South-East Asian region are operated within this paradigm.
Businesses tend to be thought of in terms of the buildings, production facilities, retail and
wholesale outlets and networks they control, items that can basically be purchased, owned
and controlled and disposed of with relative ease. Businesses use these assets to implement
their strategies and fulfil their functions to exert influence over the marketplace. Competitors
are fairly easily able to emulate market leaders in assets and basic marketing strategies that
would potentially appear to be the most successful path. The whole management, financial
and accounting procedure within corporate organisations is based on the utilisation,
consumption, movement and acquisition of these physical items. However when examining
the values of businesses in the region, one finds that their market values far exceed their net
tangible asset values (total assets minus total liabilities). The difference in the market and net
tangible asset value is the value of the firm’s intellectual property. Table 9.1. below shows
the various values for some major firms in the South-East Asian Region.
Table 9.1. Net Tangible, Market and Intangible Values for Some Listed Companies
in the South-East Asian Region
Company Country Net Tangible Intangible Market Value
Asset Value Asset Value
The shift from the industrial to the knowledge paradigm, even in traditional manufacturing
industries has a number of consequences for business strategy and the intellectual property
structure is a major influence upon the way firms need to develop, implement and exercise
their strategy options. Companies have focused on guarding their physical assets which is
relatively simple are the objects are tangible and can be locked up and secured. However

9. history has shown when top management moves from one firm to another there can be dire
consequences for the former company. One of the most dramatic examples of this was the
move of Lee Iacocca in 1979 to Chrysler taking a number of top Ford marketing executives
with him. Ford lost a substantial amount of its market know-how and eventually market share
to Chrysler. This showed corporate America that know-how is one of the most important
forms of intellectual property a company can posses and led to the development of
management contracts with secrecy, confidential information and exclusivesity clauses to
prevent former managers utilising their know how in the same industry after they leave
company service. Usually large payout provisions exist to secure these rights for the company
over their employees.
To fully understand the importance of intellectual property and its true value to the strategy
of a firm, one has to appreciate its embedded ness within the core of the company’s mission
and objectives and that intellectual property itself highlights the company’s competencies that
it uses in its core strategies. To view intellectual property otherwise would miss the very
concepts of creating barriers to entry for potential competitors, creating competitive
advantage over competitors and understanding the relative nature of the concept. Intellectual
property is also at the heart of winning customers ‘hearts and minds’, gaining trust and
reputation in the market place and making a strong emotional connection with customers,
which is at the heart of any company’s core mission. Figure 9.8. shows the integration
between a firms core mission and intellectual property.
Figure 9.8. Integration between a Firm’s Core Mission and Intellectual Property
1. Recognition 2. Desirability
To develop public recognition and carry over To enable companies to delivery good
certain desired values to consumers products with superior performance to
competitors, new features, extended product
life, etc, so that products are competitive and
desirable.
Trademarks and certain Copyright Patents, Registered Designs and
Information Proprietary Knowledge
3. Form 4. Emotional Connection
To develop recognisable literary and visual To maximise financial returns for production
forms that add value and assist in creating an undertaken by the company, add to product
inherent desirability to the form of differentiation and develop an emotional
communication between company and connection with consumers.
consumer.
Copyrights and Trademarks Brands and Trademarks
Adapted from Otto A. Stamm 200018
If intellectual property is viewed as a box of tools that can be combined in a particular way to
fulfil marketing and protection objectives, then intellectual property strategy can be
harnessed to benefit the firm greatly. Thus using intellectual property in this way is the best
way to safeguard and protect a company’s products and position in the market place.
Intellectual property tools will have different values in different industries, but the general
array of tools useful to a firm, which can be utilised in different mixes to achieve an overall
business strategy is shown in figure 9.9.
The three prime influences on the firm are the advent of new technologies, product life cycles
and competition. The firm must be able to apply gathered knowledge to create its source of
proprietary knowledge to form the core and basis of its general business strategies to apply
to the market place against existing competitors, who will be undertaking their own cycle of
strategy development and implementation. The success of the firm’s strategy involves
packaging its intellectual property into the correct mix of strategies and protections to
develop differentiation and relative competitive advantage over its competitors. Skills and
knowledge creatively applied to developing a general business strategy to maintain a

10. sustained competitive advantage, which utilises recognition symbols, customer relationships,
emotional connections with consumers, correct product forms that are desirable, manifested
in patents, designs, proprietary knowledge, trademarks and copyright, supported by various
employee agreements.
Figure 9.9. The General Tools of Intellectual Property in Business Strategy
Influence of
New
Product Development Technology
- Invention (new to the world)
- New to company product Competitors
- New Style, variant or benefits
Patent, Registered
Design, Proprietary Influence of
Knowledge (secrecy and Product
non-disclosure Lifecycle
agreements)
Process Development
(manufacturing)
Patent, Proprietary
Knowledge (secrecy and
non-disclosure
The Market
agreements) The General Business
Market Strategy Place
Strategy
Market parameters (mix) Values
Channels Expectations
Knowledge Emotions
Image & Story (target)
Knowledge, Creativity, Recognition
Branding, Trademarks, Potential
Copyright Emotional
Connections
Some parts of intellectual property are easier to copy and emulate by others. This is why
continual improvement, change and new product development are the best methods of
protection and maintaining a relative competitive advantage over competitors. Failure to
improve, change and develop new products will render companies in slow technology
emerging industries as a seller of generic products, like in the pharmaceutical, household
cleaning, cosmetics and agricultural chemical industries. In the case of fast emerging
technology industries companies will become completely irreverent to the market which itself
may quickly cease to exist, as is the case in mobile telephones, personal computers and
electronic media storage. Figure 9.10. shows the IP/market scenarios with competitive
advantage in slow and fast technology emerging industries.
Figure 9.10. a. shows the scenario of a slow emerging technology market where changes in
technology as well as being steady, tend to be incremental. In the early years, patents are
relied upon for protection, but through time as more companies develop new ways to
produce the same product, relative competitive advantage can only be improved through a
new technology development. Once a new product based on the new technology is launched
into the market and consumers except that technology, the existing market based on the old
technology continues, but as more companies enter the market, it becomes difficult to
differentiate between different products and the market begins resembling a commodity
market. Price discounting will become the primary strategy to maintain market share. As
further advances in technology continue to change product form, other methods of
intellectual property protection like registered designs to protect the form and branding
become more important protection than patents. The situation in the scenario of fast
emerging technology markets, shown in Figure 9.10. b. is usually a market protected by
patents through the complete evolution of the market as new emerging technology changes
the basic technology behind the basic product form. As the new technology is proven to be

11. more efficient and cost effective to consumers, the market for the old product will eventually
die out.
Figure 9.10. IP/market scenarios with competitive advantage in slow and
fast technology emerging industries
a. Slow Emerging Technology Market Air Fresheners
Branding
Primary Used IP Protection
Relative Competitive Advantage
Registered Designs
Liquid Air Fresheners
Patents
Car Air fresheners
Failure to advance IP
and convert into new
products results in
competition in a price
sensitive market where
Gel Air Fresheners
brands don’t attract
consumer recognition
1960s 1970s 1990s Time
b. Fast Emerging Technology Market Electronic Media Storage
Primary Used IP Protection
Relative Competitive Advantage
Patents
Pen
Drives
Compact Rapid decline of media
Disks use after introduction of
new media until product
ceases to be used
anymore, Companies must
cease operations or switch
Floppy Disks
to new technology
1960s 1970s 1990s Time
To the firm, the most important aspects of the intellectual property mix are those
components that assist the product to sell. There is little point developing a new product that
has good protection, if it does not sell well in the market. It is rarely a patented technology
that sells the product. More likely, it will be the perception of it the company portrays to
consumers. When Nike developed the encapsulated gas membrane within the sole of the

12. shoe, it was introduced as “Nike Air’, conjuring an image of the product’s desirability through
consumer emotions and aspirations, identifying with the emotional rewards in sport and
leisure with the slogan ‘just do it’. Although the technology of the shoe may have been
brilliant, it was the intellectual property of branding, trademarks and copyright that developed
the real value for the company. As was seen, some parts of the concept was quickly
emulated by others, but not the complete winning intellectual property mix, so Nike’s was
able to maintain a relative competitive advantage over its competitors. The images of
Mercedes Benz, Harley Davidson, Apple, Listerine, Coca Cola, Marlboro and Calvin Klein
conjure up emotional responses in consumers about image rather than technical interest for
the actual product artefacts themselves.
So far the discussion has tried to show how widely intellectual property is used in business
and the role it plays in market dynamics. The concept of intellectual property strategy goes
far beyond legalistic definitions and institutions, and used as part of the overall firm strategy,
although it may not have been recognised as such. Intellectual property strategy is a craft
like other strategy formation and lies at the very heart of companies’ value.
The intention of the intellectual property legal framework is to provide moral, economic and
legal rights to creators in their creations and to the rights of the public in accessing those
creations and to promote creativity and dissemination and application of those results, to
encourage fair trade, which would contribute to social and economic development19. However
many commentators are strongly critical of the system

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Foster, R., N., (2000), ‘Managing Technological Innovation for the Next 25 Years’, Research-Technology Management,
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