Intellectual Property Protection in Small Knowledge Intensive Enterprises

Introduction

Small knowledge intensive enterprises has a fundamental role in global economy. In order to remain competitive, small enterprises need constantly create new knowledge. Small enterprises have certain advantages over larger corporate entities: they are able to respond quickly to changing market demand, they are organizationally flexible, and they often have efficient internal communications (Cordes et al., 1999; Mogee, 2003). As a result, small enterprises can more easily incorporate new working practices and processes into their operations and thus, be innovative. The purpose of intellectual property legislation is to provide incentives for innovation. However, small enterprises has difficult to utilize intellectual property rights (IPRs), especially patent protection due to possible patent enforcement costs. According to e.g. Lanjouw & Schankermann (2004) litigation is becoming increasingly difficult to avoid due to large enterprises’ strategic patenting behavior. This makes legal forms of protection, in other words, protection that is granted by (traditional) national Intellectual Property Rights (IPRs) legislation, difficult for small enterprises to utilize. (Lanjouw & Schankermann, 2004; Coleman, R. & Fishlock, D. 1998; Miles, I. & Andersen, B. & Boden, M. & Howells, J. 1999). The only sustainable competitive advantage for small enterprises is continuous innovation. This requires efficient knowledge management practices and processes and place where knowledge can be shared, stored and created. As mentioned, for small enterprises patent system does not offer incentive for innovation. Small enterprises need to create internally built processes that secure fast innovation cycle and also protect their embedded intellectual property.

The aim of this article is to examine the ways in which knowledge and intellectual capital is protected in small knowledge intensive enterprises and to discuss the factors that influence a small enterprise’s propensity to adopt processes and practices¹ to secure their intellectual property and knowledge. The article makes recommendations as to why and how small enterprises can secure their intellectual property and knowledge. The study emphasises intellectual property protection and the development of knowledge management systems and processes that support knowledge sharing and creation, innovativeness, and knowledge protection. The analysis will focus mainly on intra-organizational activity.

The article starts with a short discussion on the role of IP protection in small knowledge intensive enterprises. The focus is on intellectual asset management strategy, intellectual property protection, knowledge creation, and transfer strategy. The main definitions and concepts are presented in this section. The first section also includes a brief description of the study sample and the methods used in the data collection and analysis. The second section discusses the methods, practices, and processes used by small enterprise managers in order to protect their embodied IP. Also, the value of these mechanisms in the process of intellectual property protection will be evaluated. Factors that might have an influence on an enterprise’s propensity to manage and protect their IP will be discussed. The section will end with a discussion of the different knowledge categories; in addition to examining the knowledge process cycle and its relation to intellectual property protection. The final section of the article summarizes the results of the study.