Operational challenges and ST's proposed solutions to improve collaboration between IP and R&D in innovation processes

California Management Review

Volumn 55, Issue 4, 2013, Pages 143-156

  Cesaroni, Fabrizio ^a   Piccaluga, Andrea ^b  

^a DEPARTMENT OF BUSINESS ADMINISTRATION   (Spain)

^b SCUOLA SUPERIORE SANT ANNA   (Italy)

Author keywords

Case study; Innovation; Intellectual property; R D

Indexed keywords

EID: 84929668287     PISSN: 00081256     EISSN: 21628564     Source Type: Journal    
DOI: 10.1525/cmr.2013.55.4.143     Document Type: Article

References (55)

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2. O. Alexy, P. Criscuolo, and A. Salter, "Does IP Strategy Have to Cripple Open Innovation?" MIT Sloan Management Review, 51/1(Fall 2009):71-77.
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5. See also L. G. Crovitz, "Patent Gridlock Suppresses Innovation", Wall Street Journal, July 14, 2008, p. B1.
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12. WIPO, World Intellectual Property Report: The Changing Face of Innovation (Geneva, Switzerland: World Intellectual Property Organization, 2011), p. 8.
13. Davis and Harrison identify five different levels of complexity of IP managerial practices [J. L. Davis and S. S. Harrison, Edison in the Boardroom: How Leading Companies Realize Value from Their Intellectual Assets (New York, NY: John Wiley & Sons, 2001)].
14. They represent these five levels as a pyramid, and call it Value Hierarchy. "Each level [of the pyramid] represents a different expectation the company has about the contribution that its IP function should be making to the corporate goals"
15. [S. S. Harrison and P. H. Sullivan, Edison in the Boardroom Revisited: How Leading Companies Realize Value from Their Intellectual Property (Hoboken, NJ: John Wiley & Sons, 2011), p. 16].
16. Somaya, Teece and Wakeman, op. cit. See also the article by Leten and colleagues in this Special Issue for a discussion about which IP strategy could be pursued by an orchestrator of an innovation ecosystem to manage the allocation of IP rights among ecosystem partners. Bart Leten, Wim Vanhaverbeke, Nadine Roijakkers
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18. Examples include micro-electro-mechanical systems (MEMS) and sensors, as well as new healthcare applications such as portable diagnostic equipment. These applications are referred to from ST as "more than Moore" solutions. Broader information on the "more than Moore" strategic approach followed by ST can be found in ST's Corporate Social Responsibility Report 2009, pp. 14-15. On "System-on-Chip" applications, see G. Linden and D. Somaya, "Systemon-a-Chip Integration in the Semiconductor Industry: Industry Structure and Firm Strategies", Industrial and Corporate Change, 12/3(June 2003):545-576.
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22. For this purpose, we made use of both corporate public reports (Form 20-F Annual Reports and Corporate Social Responsibility/Sustainability Reports) and press articles from the Info-Trac's Prompt database. This database collects press articles from a large set of trade journals, magazines, and other specialized publications, and then classifies those articles according to several categories of events, SIC codes, and reference companies. Among other uses, Prompt has been largely employed in management studies to obtain information on firms' new products' developments [e.g., see A. Fosfuri and M. S. Giarratana, "Masters of War: Rivals' Product Innovation and New Advertising in Mature Product Markets", Management Science, 55/2(February 2009):181-191].
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25. In 2012, ST has been included in the Thomson Reuters Top 100 Global Innovators list. See , accessed January 2013.
26. According to our analysis of U. S patent data, more than 90% of ST's patent portfolio involves patents belonging to "Electricity" (IPC class H), and around 25% of patents are in the specific class of semiconductor devices (class H01L). Less than 1% of ST's patents are biomedical patents (mainly, they belong to the classes C12, A61, and G01N).
27. This definition recalls the theoretical representation of the Value Hierarchy concerning the practices of IP management 1[Davis and Harrison, op. cit; Harrison and Sullivan, op. cit.].
28. Linden and Somaya, op. cit; L. Dibiaggio, "Design Complexity, Vertical Disintegration and Knowledge Organization in the Semiconductor Industry", Industrial and Corporate Change, 16/2(April 2007):239-267;
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31. Cost increases were also due to litigations the company faced in that period. Litigations with SanDisk Corporation and Tessera Technologies, Inc. were particularly challenging for ST. During the period 2004-2007, SanDisk filed various complaints against ST for patent infringement concerning patents related to memory products. After a few Courts' decisions, the two companies eventually settled the dispute in September 2009 on amicable and confidential terms (see ST's Annual Report 2009). The dispute with Tessera started in 2006, when the company initiated a patent infringement lawsuit against ST and other semiconductor producers concerning two patents related to ball grid array packaging technology. Those patents expired in September 2010.
32. The next trial has been tentatively scheduled for April 2014 by the U. S District Court for the Northern District of California (see ST's Half-Year Report 2012-all Reports are available at , accessed January 2013).
33. A Proactive IP strategy represents the third level of the IP's Value Hierarchy as described by Davis and Harrison, op. cit., which has been then redefined Capture Value level by Harrison and Sullivan, op. cit. According to other scholars (Somaya, op. cit.), ST's proactive IP strategy represents a mixed strategy in which a "proprietary IP strategy" is applied to the most relevant businesses and an "IP leveraging strategy" is applied to more marginal businesses.
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38. MEMS = Micro-Electro-Mechanical Systems.
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