Strategic Management of Intellectual Property: An Integrated Approach

William W. Fisher III; Felix  Oberholzer-Gee

Article | California Management Review | Summer 2013

Strategic Management of Intellectual Property: An Integrated Approach

by William W. Fisher III and Felix Oberholzer-Gee

Abstract

In many organizations, the R&D, strategy, and legal functions are poorly integrated. As a consequence, firms miss opportunities to create and exploit the value of intellectual property. Functional silos are one reason for the lack of integration. More important, however, is the lack of a common framework and even language that would allow engineers, lawyers, and business executives to manage IP assets better. This article provides such a framework. There is no one best way to manage IP, and many managers overestimate the attractiveness of using IP to exert market power. Rather, the value of the various means to protect and benefit from IP depends on firm strategy, the competitive landscape, and the rapidly changing contours of intellectual property law.

Keywords: intellectual property; innovation management; strategic management; knowledge management; legal aspects of business; licensing; Law; Innovation and Management; Knowledge Management; Intellectual Property; Business Strategy;

Format: Print

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Citation:

Fisher III, William W., and Felix Oberholzer-Gee. "Strategic Management of Intellectual Property: An Integrated Approach." California Management Review 55, no. 4 (Summer 2013): 157–183.

Strategy, at its core, describes how a company attains superior performance. In industry after industry, there is a wide range in company performance resulting from the various strategies adopted by individual firms. Underneath all of this variation, however, are principles that are straightforward and consistent across industries. This pamphlet outlines these principles to help you set and evolve your company’s strategy. Here we offer a simple and succinct way to think about the sources of competitive advantage. We hope that our way of thinking about why some companies do far better than others is both illuminating and inspiring.

This case centers around the shareholder dispute between three major shareholders of Turkcell, and how its management vied against increasing regulatory intervention and market competition in the absence of a fully-functioning board. The battle for control of the Turkish telecom giant led to several years in which the company could not hold annual shareholder meetings, renew its board of directors, or pay dividends, and lacked a board-approved operating budget. Nevertheless, it maintained its majority market share and was the only telecom player with positive EBITDA in the market. What were the implications of this dispute for Turkcell's broad ambitions? How would the continuing battle affect management, talent, and the company's financial performance?

Market imperfections are central to understanding the mechanisms that permit firms to capture value. Through competition, leading firms often reduce these imperfections, making markets more efficient. The remaining imperfections become a primary impetus for government intervention. Hence, understanding residual market imperfections—those imperfections that persist after market competition and regulation are accounted for—must undergird any assessment of the long-term attractiveness of firm strategies. Our proposed framework provides an integrated view of competition and government intervention, two of the principal forces that influence variation in firm profitability.

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Strategic Management of Intellectual Property: An Integrated Approach

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