Technology strategy revealed: patterns and influences of patent-licensing behaviour in Japanese firms

Patterns of patent in-licensing and out-licensing are examined among Japanese firms in the pharmaceuticals and electronics industries. Sixty-five questionnaires and 24 interview-based cases provide insights into what influences the decisions to 'make-or-buy' (in-license) knowledge assets and to 'exploit-or-sell' (out-license) R&D outputs. Firm size and resources, the existing portfolio of technologies, and ongoing exploitation strategies are all influential. Significant increases in in-licensing and out-licensing and associated changes in the management of intellectual property are also a response to changing competitive pressures and markets in Japan for both these sets of firms. Reciprocal technology-sharing agreements are evolving into more formalised relationships and firms are being pushed to improve their technology brokering capabilities. Looking beyond abstracted patent data, the study provides additional insights into the influences on strategic R&D selection as well as the general management dilemmas associated with the leveraging of intellectual assets, core competence selection and 'markets versus hierarchies' decision making.