Patenting strategies of firms

Abstract

This essay is meant to discuss the patenting strategy of firms. It is started with patent as appropriability mechanism and patent counts as the innovation output indicator, followed by discussion why there are problems by taking it as a measure of innovation. The motivation of firms for patenting is elaborated in which there are strategic motives for patenting for firms beyond traditional protecting motive from imitation. The different motives for patenting among firms with different type of technology and the relative importance of patents for appropriating their innovation as well as a phenomenon called “patent paradox” are further discussed.

I look into the literatures about the definition of patenting strategy of firms and how the strategies in patenting are different across technological knowledge and industries. Furthermore, I delve further into the role of firm size in patenting strategy. Some empirical researches suggest that there is a positive relationship between firm size and patent propensities. The discussion will be finalized by looking at the patenting strategies of firms in developing countries. Beside the fact that there are very few studies covering developing countries, some scholars suggest that there are specific factors that need special attention.

Figure 1. Patent propensity by size class of 604 firms in Germany and France

(Arundel and Kabla, 1998)

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