Appropriability and the Patenting Process: An Exploratory Analysis of Pharmaceuticals

Abstract

The literature reports that patents are commonly seen as isolating mechanisms. Nevertheless, our knowledge as to how firms manage both patents and the patenting process to capture the benefits realised from innovative effort is still scant. In this paper we explore how firms use the patenting process to enhance appropriability conditions. Based upon case studies of six various sized UK pharmaceutical firms our findings suggest that it is mainly by managing a whole portfolio of patents that firms will generate the full benefits of patents and limit the operations of (potential) competitors. The portfolio approach is one alternative to broaden the scope of protection. Along the same lines our sample firms also revealed their interest in broader territorial coverage. Although the protection achieved is largely determined by the legal framework, firms revealed that the timing of application is pivotal in determining the scope of the final patent grant and other related follow-up patents.