Customizing licensing strategies to inventions: Comparing business unit and R&D inventions

Most of the focus in the licensing literature has been on how firm and market characteristics affect licensing activity. However, in the field of management of technology licensing, there is also a need to understand within-firm heterogeneity in managing licensing activity beyond firm- and market-level approaches. Inventions originate in different parts of the firm [research and development (R&D) lab, business unit]. This heterogeneity requires strategic decisions about whether to enter the licensing market, and then, whether to put restrictions in the licensing contract (exclusivity clauses) if licensed. Using invention-level licensing data, this study analyzes when and how these inventions sourced from different parts of a firm participate in markets for technology. The results suggest that business unit inventions, compared with R&D inventions, are less likely to participate in the licensing market and more likely to include exclusivity clauses if licensed. The results add new empirical evidence for and also help advance the management of technology licensing.