Intellectual property protection: the case of three Swiss life science SMEs

Abstract

Little is known about how small internationalized firms (‘born globals') protect and appropriate rents from their intellectual property (IP) in born globals. Moreover, conflicting predictions exist as to how this protection should be implemented. Therefore, in this book chapter we analyse the strategies born global firms use to protect their intellectual property (IP). We believe that such an exploration is highly desirable since extant literature on international entrepreneurship has only to a very little extent dealt with how born globals protect their IP, despite the fact that recent contributions highlight the fact that the basis of a born global's competitive advantage is its unique knowledge which needs to be protected against outflow and imitation.

Our study therefore has an exploratory character. It employs a mixed-method approach of using quantitative data from the Swiss Innovation Survey, and qualitative data from interviews with six born globals. Our paper strives to relate the extent to which born globals appropriate economic returns from their IP to their firm-internal characteristics. The findings suggest seven endogenous and exogenous factors that significantly influence this extent: financial resources, experience with infringements, collaborations, market strategy, technology's risk of imitation, market's competitive structure and technological level.

Our findings further suggest that born globals protect their IP with both patent-based and ‘de-facto' protection strategies. They exhibit a high degree of professionalism with respect to IP protection. These findings relativise earlier literature that asserts that SMEs lack professionalism when it comes to the protection of their IP. Finally, implications of these findings for the IE literature are discussed.