Open Intellectual Property Strategies for Emerging Technologies - An Exploratory, Mixed-Method Investigation of Patent Pledges

Patent owners increasingly employ strategies called patent pledges. This strategy involves the owner offering a broad availability of their active patents for free or at a reasonable fee. Patent pledges span across multiple industries from automotive over information and communication technology to biotechnology. This research investigates patent pledges through an exploratory stance and by utilising a mixed-methods approach. The existing literature is inconsistent and lacks academic rigour. Most patent pledge studies are conceptual and lack the sufficient evidence to offer authoritative results. The first problem is although there exist several preliminary definitions of patent pledges, none are sufficiently derived from empirical data. A second problem is that that existing literature is inconclusive on the reasons why patent owners employ patent pledges. Previous scholars have predominantly relied on findings from studies of other sharing mechanisms, as well as the broad literature on open innovation and patent law. A third point is that research on the effect of patent pledges on technology diffusion remains unclear, because existing studies have utilised research methods with significant limitations and deliver contradictory results. This research addressed each problem in three distinct studies. Study 1 focused on the definition and taxonomy of patent pledges and derived its results from 60 patent pledge statements of patent owners. This secondary data was analysed by an abductive approach through multiple coding cycles. The result was a three-dimensional taxonomy of patent pledges. The patent pledge taxonomy was then extended to a patent licensing taxonomy which compromised every common type of patent licensing approach. Study 2 explored the motivation behind patent pledges and utilised case study research with two data sets: primary data from 22 semi-structured interviews and secondary data from 50 patent pledge statements. The study was able to access renowned experts directly involved in designing and executing patent pledges. Experts included presidents of patent departments from global firms and a former president of a national patent office. Study 3 developed an abstract agent-based model to examine the effects of patent pledges on technology diffusion. The simulation model enabled the investigation of inter-firm technology diffusion of two competing technologies, where only one was subject to a patent pledge. Two cases were considered: in case I both technologies were similar, but in case II the pledged technology was inferior. Study 1 revealed that • eight patent pledge types exist; • the most frequent patent pledge type is subject to certain conditions but can be accessed by the unrestricted public free of charge and that • the majority of patent pledges occur in the are of information and communication technologies. Study 2 revealed that • thirteen patent pledge motives in three categories exist; • the main goal of patent pledges is to drive technology diffusion and that • most other motives for patent pledges also relate to the goal of fostering technology diffusion. Study 3 revealed that • the relationship between the strength of patent pledges and their effect on technology adoption rates is not linear; • patent pledges can lead to a market share ’win’ of an inferior technology that competes with a superior alternative and that • the time period in which the adopter category ’Early Majority’ adopts is, in most cases, the crucial phase that determines the success of patent pledges. The three studies provide a substantial intervention in several ways. The empirical development of a patent pledge definition and two taxonomies facilitate the distinction to other licensing approaches and set a common ground for future research. The taxonomies constitute managerial tools that can be used to visualise patent licensing landscapes for specific units of interest. Insights about motives enable a better understanding of patent pledges and help practitioners as well as policymakers making informed decisions. Finally, the investigation of patent pledge effects on technology diffusion adds to the diffusion literature and supports (i) firms that need to evaluate whether or not to conduct a patent pledge; (ii) firms that need to react to patent pledges of competitors; and (iii) firms that face the decision whether to adopt a pledged technology