Commercial success with a new technology usually depends on the exclusive ownership of a critical asset or capability. But to create the technology, an innovator draws on knowledge from many different sources. Inventors who mismanage that tension often fail to successfully commercialize their innovations. To understand how to manage the tension, the authors carried out a comprehensive analysis of more than 1,000 inventions from the University of Wisconsin's Technology Transfer Office. They interviewed the TTO's senior leadership, IP managers, licensing and contract managers, legal counsel, and other staff to get firsthand knowledge of how inventions were evaluated for commercial potential. From this research they identified seven IP traps that unwary inventors (individuals and companies alike) fall into when developing scientific discoveries and inventions for the commercial market. The traps include publicly disclosing information prematurely, neglecting to enforce patent infringements, failing to demonstrate sufficient originality, overrelying on known science, failing to stake out the best territory for applications of the technology, mismanaging attribution of contributors, and ceding too much control over IP to funders. Drawing on examples encountered in their research, the authors describe these traps and offer advice on how to avoid them.

This is an MIT Sloan Management Review article. While the protection of intellectual property, or IP, seems to be at odds with a company's pursuit of open innovation, or OI -the selective use of research carried out elsewhere -businesses in the know can align these two approaches. An appropriate IP strategy can actually be an enabler of OI activities. In fact, an increasing number of companies, such as International Business Machines Corp., are involved in interconnected "ecosystems"-critically dependent on cooperating with other parties to generate innovations and profits. The authors'research has found that the enabling function of IP depends on the specific circumstances under which companies engage in OI. Two variables in particular have emerged as critical determinants: the technological environment in which the business is active, and the knowledge distribution among potential collaborators. Each variable is presented as having two possible values. The technological environment, for instance, is either calm or turbulent. Concerning the nature of innovative knowledge distribution, external knowledge can be thought of as residing either with the few (in puddles) or with the many (in oceans). By combining these two dimension sets, and thus creating four possible scenarios, we provide a better sense of a firm's most appropriate IP/IO strategy. Depending on the category into which the company falls, IP plays a different role as an enabler of OI.