Title: Patent strategies for ensuring the appropriability of innovation: case studies of inkjet printers and DVD drives

Authors: Yoshimasa Goto; Kiminori Gemba; Shuichi Ishida

Addresses: Academia Research and Industry-Academia-Government Collaboration, Nagoya University, Furo-cho, Chikusa-ku, Nagoya 464-8601, Japan ' Business School of Innovation Management, Hosei University,3-3-9 Kudan-kita, Chiyoda-ku, Tokyo 102-0073, Japan ' Graduate School of Technology Management, Ritsumeikan University, 2-150 Iwakuracho, Ibaraki, Osaka 567-8570, Japan

Abstract: In most markets, essential patents may not help patentees to dominate the market because a single product involves many essential patents, which are distributed among many companies; this allows many companies to enter the market. In the inkjet printer and DVD drive markets, however, essential patent holders have succeeded in dominating the market. This paper describes the patent strategies that inkjet printer companies and DVD drive companies have used to ensure the appropriability of innovation. Canon, Epson, and Hewlett-Packard licensed their essential patents only among themselves and did not license these patents to other companies. This strategy allowed these companies to monopolise the licenses of the essential patents and to dominate the market. The five subsidiaries of the six main DVD standard essential patent holders succeeded in avoiding the payment of expensive patent royalty, which served as a barrier against their competitors. This strategy allowed them to dominate the DVD drive market successfully.

Keywords: appropriate innovation; inkjet printers; essential patents; DVD drives; patent royalties; standardisation; optical discs; patent strategies; patent licensing; market domination.

DOI: 10.1504/IJBSR.2015.072583

International Journal of Business and Systems Research, 2015 Vol.9 No.4, pp.334 - 354

Received: 14 May 2015
Accepted: 24 May 2015
Published online: 19 Oct 2015 *

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