Managing Intellectual Capital: Licensing and Cross-Licensing in Semiconductors and Electronics

TLDR

Innovation and intellectual capital management are increasingly critical in high‑technology competition, with electronics and semiconductor firms relying on extensive licensing and cross‑licensing—a need amplified by stronger patent protection and more active IP owners. A high‑quality patent portfolio enhances cross‑licensing bargaining power, reduces royalty payments, and directly supports product and process innovation.

Abstract

Innovation and the management of intellectual capital are playing an increasingly important role in competition in high-technology industries. To operate in markets where innovation is cumulative, such as in electronics and semiconductors, firms frequently need to engage in extensive licensing and cross-licensing. This need is amplified by recent increases in the strength of patent protection and by the more active licensing stance of intellectual property owners. A high-quality patent portfolio not only reflects the firm's inventive capacity, but may significantly increase its crosslicensing bargaining ability and reduce royalty payments. In addition, it may directly contribute to its product and process innovation.