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Managers tend to misunderstand the difference between what kinds of value patents can create (practice, license, litigate, and deter), and the kinds of business models and strategies that they can be used to support. In a previous post, I said that this is the difference between motivations and modes. In a recent article in the MIT Sloan Management Review, there is some research that demonstrates this. The author and colleagues conducted a survey asking managers to describe the “purposes that IP rights served for their business-area strategies.” What their analysis revealed was not purposes at all, but a series of 5 “IP strategy scopes” which really just described how far the company would go to pursue IP protection.

1. Full-fledged IP Protection
2. Patent and trademark control
3. Trade. IP is mainly to be licensed out or sold off.
4. Pure branding.
5. Support core R&D

What is interesting about this is that numbers 2 and 4 really don’t relate to patent strategy at all - but to trademarks and branding. Therefore, there really are just three distinct “scopes” for patent strategy here. The first basically refers to the method of trying to protect every possible thing in an effort to block entire spaces. Scopes 3 and 5 are coherent in that they clearly identify their motivations and the kinds of value they are trying to generate. For scope 3, it is Licensing, and for scope 5 it is Practicing.

So, I found all of this interesting for the way that it demonstrates how murky IP management remains, and just how rare it is for managers to think clearly about how to integrate IP into their business models and strategies. It’s also interesting that a major conclusion of the study is the strong shift toward scope 1 (trying to use IP to block entire spaces) as the new “dominant practice” in IP management.

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