Somaya and Grahan (2006)
|Somaya and Graham (2006)|
|Title:||Vermeers and Rembrandts in the Same Attic: Complementarity between Copyright and Trademark Leveraging Strategies in Software|
|Author(s):||Somaya, D., Graham, S.J.H|
|Citation:||Somaya, D., & Graham, S. J. (2006). Vermeers and Rembrandts in the same attic: Complementarity between copyright and trademark leveraging strategies in software. Georgia Institute of Technology TIGER Working Paper.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||Primary Data: The authors contacted 25 executives identified as IP legal counsel or IP managers in 19 of the top 100 U.S. packaged software firms by revenue (2001). 6 individuals (38%) at 5 firms agreed to be interviewed. These firms each had greater than $50 million annual revenues and 500 employees in 2001. Using open-ended unstructured interviews we asked each respondent whether software firms were likely to use different types of IP together in a complementary manner.
Secondary Data: The authors focused on the (IBM) PC packaged software industry, and included all top-100 firms in this segment from 1985 to 1999 (by revenue, obtained from a commercial firm, Softletter). They identified all copyright, patent, and trademark litigation involving the firms in the sample by matching on firm names, using IP litigation data from the Federal Judicial Center (FJC). Mergers and acquisitions among firms were also tracked to ensure that ongoing litigation was assigned to the correct successor firms. In addition to IP litigation data, the authors collected copyright count data from the Library of Congress, patent applications, trademark filings, and a count of registered patent attorneys employed by each firm from the United States Patent and Trademark Office (USPTO), along with public accounting data for the firms from Research Insight. The Softletter-100 lists also provide data on founding years, annual revenues and employment for each firm, which supplement the Research Insight data. After accounting for missing data, they have an unbalanced sample of 88 software firms over the time period 1985-1999.
|Data Type:||Primary and Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
We examine the interrelationships between firms’ efforts to leverage different types of intellectual property (IP) rights. While prior research has tended to view different forms of intellectual property as substitutes, we argue that they can also be viewed as complements. We motivate this argument by shifting the unit of analysis away from the level of a single invention to the level of the technology, product or firm. Using unstructured interviews, we develop hypotheses about the causes of IP complementarity. Specifically, we hypothesize that complementarity may result from common inputs into the management of IP within the firm, such as managerial attention to IP issues and organizational resources deployed for IP management. Our hypotheses are tested in the PC software industry with a seemingly-unrelated-regression (SUR) model, which provides support for complementarity between copyrights and trademarks in software, and suggests that this complementarity stems at least in part from our hypothesized common inputs into IP management. Our work addresses both the relative neglect of non-patent intellectual property rights and the disproportionate reliance on the IP-as-substitutes view in prior research.
Main Results of the Study
- The authors propose a broader view of the interactions between different types of IP, where both substitution and complementarity is possible. They abstract away from individual inventions to look at the set of multiple inventions contained in a product or a firm.
- When the analysis is focused on a set of inventions, opportunities for IP complementarity arise because firms may extract value by leveraging one type of IP for some inventions while at the same time leveraging another type of IP for other related inventions. Such complementarity may occur due to either production-cost or market-driven interactions, which increase the value of using different types of IP together.
- The research uncovers robust evidence that the use of two types of intellectual property – copyright and trademark – is strongly correlated in software firms.
- The interview evidence also supports the idea that these forms of intellectual property may be leveraged in a complementary fashion. From a managerial perspective, this finding suggests that firms may benefit by paying attention to the complementary configuration of different types of IP to protect their bundles of intellectual assets, rather than focusing on each one in isolation.
- Both the interview evidence and empirical results corroborate the use of common indivisible inputs in IP strategies, expressly managerial attention and organizational resources, as an important explanation for our finding of IP complementarity.
Policy Implications as Stated By Author
- Future research should explore the conditions under which specific types of IP are profitably used as substitutes, or as complements. Another potential direction for research would be to abstract away from the single invention unit of analysis along the temporal dimension, and study the interactions between different types of IP for a related set of inventions over time.
- The results do not specifically explain why some firms paid greater attention to IP strategy and developed superior organizational IP resources over certain time frames. Future research can help us understand when firms react to changes in their intellectual property environments with responsive strategies, and when they do not.
Coverage of Study
|Level of aggregation:||IP Professionals|
|Period of material under study:||2001|
|Level of aggregation:||Company|
|Period of material under study:||1985-1999|