Relationship Between Intellectual Property Protection Strategy And Innovation Performance

Technology innovation is the value creation activities of enterprises. But companies often can not fully achieve benefits arising from innovation, thus derive value appropriability and intellectual property (IP) protection issues.The concept and dimensions of this issue have not been clarified yet, thus the "black box" of technological innovation is yet to be revealed.Specific research on pharmaceutical industry is not enough.Although most studies have emphasized the importance of IP protection, very little empirical research has been conducted on the internal mechanism between IP protection and innovation. In order to clarify the relationship between IP protection strategy and openness of innovation in different innovative activities, and its impact on technological innovation performance, we use PFI(Profiting from Innovation) framework which was proposed by Teece (1986)as the startpoint of our study.Based on the existing research of regime of appropriability, with the integration and extension of connotations of IP protection, We explored the influence of pharmaceutical company’s IP protection strategy on its innovation performance in the background of open innovation.In accordance with the official degree of IP protection, we extract the knowledge asset protection to three dimensions:Intellectual Property Rights Protection, Knowledge Isolation mechanism and Knowledge Integration. IP protection is from a legal point of view,which means companies can use a formal exclusive rihgts of patents, trademarks, copyrights to protect their knowledge;Knowledge Isolation Mechanism emphasizes the use of time leading, learning curve advantages, confidential means of barriers which set up to prevent imitation; Knowledge integration is from the perspective of open innovation, which means in order to increase appropriability, Companies fuse and reconstruct complementary assets in the value chain, such as integrate technical know-how and market know-how to commercialize the innovation.This study used grounded theory to condut multiple exploratory case studies on four pharmaceutical companies and summarized different dimensions of Intellectual property protection strategy and made a series of initial propositions. We collected data using a large sample survey and explore the relationships between variables with structural equation modeling.The empirical results shows:(1) IP protection is a multi dimensional concept, which includes three isolated microscopic mechanisms as intellectual property rights(IPRs), knowledge isolation mechanism and knowledge integration. (2) Different protection mechanisms have different effects on innovation performance. IPRs and innovation openness has inverted U-shaped relationship, which means overprotection or lack of protection will result in lower innovation performance.To balance the strength of IPRs is the best choice for pharmaceutical companies. Knowledge isolation mechanism and innovation performance has a U-shaped relationship. When the strength of isolation mechanism is very high or very low, the innovation performance is high; while medium isolation strength is not conducive to the best technological innovation; and knowledge integration is always beneficial to improve innovation performance. (3) IP protection has impact on innovation performance through innovation openness. (4) The implicit character of knowledge negatively regulate IP protection and openness of innovation, while positively regulate knowledge isolation and openness of innovation., And negatively regulate the relationship betweenproperty rights and innovation openness.With the new perspective of open innovation, my research tried to find out the internal mechanism of IP protection and its impact on technology innovation performance.Compared to the emphasized on closed innovation and appropriability in the previous studies, Modern IP management underlines the open innovation paradigm and value creation. We emphasize the enterprise’s strategic choice of different protection mechanisms and its impact on their strategic choices of openess.Theoretical contributions and innovations of this paper is mainly reflected in the following aspects: (1) Place the study of knowledge management and innovation management into open innovation context and defines the concept and dimensions of IP protection. (2) Try to explore the relationship between IP protection strategy and technological innovation performance from the micro-level.(3) Introduce openness of innovation as mediator to uncover the knowledge technological innovation performance of the "black box" to solve the "open paradox".In conclusion, this study shed light both on knowledge management and innovation management.