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Managing Intellectual Capital: Licensing and Cross-Licensing in Semiconductors and Electronics
Innovation and the management of intellectual capital are playing an increasingly important role in competition in high-technology industries. To operate in markets where innovation is cumulative, such as in electronics and semiconductors, firms frequently need to engage in extensive licensing and cross-licensing. This need is amplified by recent increases in the strength of patent protection and by the more active licensing stance of intellectual property owners. A high-quality patent portfolio not only reflects the firm's inventive capacity, but may significantly increase its cross-licensing bargaining ability and reduce royalty payments. In addition, it may directly contribute to its product and process innovation.