Understanding the Licensing Option *

David J. Teece

in Managing Intellectual Capital

Published in print March 2002 | ISBN: 9780198295426
Published online November 2003 | e-ISBN: 9780191596964 | DOI:

Series: Clarendon Lectures in Management Studies

 Understanding the Licensing Option *

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Licensing is often practised by owners of intellectual capital in particular, when they do not own all the relevant complementary assets. To preserve its returns from innovation, the firm owning intellectual property will find it necessary to place restrictions on how the intellectual property is used. Depending on the strength of the appropriability regime and the intellectual property rights, firms can engage in licensing agreements. Licensing usually leads to faster and more complete diffusion of innovations and allows the innovation to be used in markets different than that of the innovator.

Keywords: appropriability; complementary assets; firms; innovation; intellectual property; licensing; markets

Chapter.  9365 words.  Illustrated.

Subjects: Microeconomics

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