From Tangibles to Intangibles - Contracting Capabilities for Intangible Innovation

CORPORATE CONTRACTING CAPABILITIES, Soili Nyste'n-Haarala, ed., University of Joensuu Publications in Law, No. 21, 2008

18 Pages Posted: 27 Feb 2009

See all articles by Nari Lee

Nari Lee

HANKEN School of Economics

Date Written: June 27, 2008

Abstract

Firms buy, sell, and glean from innovation. In other words, firms variously engage in commercialization of intangible innovation. Intangible innovations are primarily protected by intellectual property rights. Firms may only be able to leverage their intellectual assets solely through these protections. Intellectual property rights and law not only provide incentives for innovation, and protect them as property, but also coordinate the modalities of their exchanges. However, this is not the only form of intangible innovations that can be commercially explored. Even when there is no intellectual property for all aspects of innovation, firms innovate, commercialize and trade the outcome utilizing organizational processes and routines - capabilities of a firm. At a most obvious level, innovation can be embodied in the tangible products and services that the firms offer. A more intangible aspect of innovation is the processes and routines of a firm. Whether they are called intellectual capital, organizational learning, organizational routines, or simply human capital composed of proficient employees, they are part of the intangible innovation or a firm. In particular, firms utilize their capabilities in the internal or external exchanges of intangibles. They may also utilize the knowledge they have generated for the internal efficiency of organization and improve the general organizational capabilities. On the other hand, if there are demands from the market/customer, industry structure, and technological features, and if the regulatory contexts and the general capabilities of the firm can support it, firms may choose to extract values by commercialize them.

In this context, this paper argues that an insight gained from strategic management and organizational research helps to bridge a gap in the research on contracts and intellectual property rights. In particular, a capabilities perspective that highlights the significance of the process and routines in the orgranisation is advocated. Additionally, some components for contracting capabilities in the transaction of innovation are identified to operationalize the contract capability perspective in the exchange of intangible innovation.

Keywords: intellectual property, contract, innovation, corporate contracting capabilities.

Suggested Citation

Lee, Nari, From Tangibles to Intangibles - Contracting Capabilities for Intangible Innovation (June 27, 2008). CORPORATE CONTRACTING CAPABILITIES, Soili Nyste'n-Haarala, ed., University of Joensuu Publications in Law, No. 21, 2008, Available at SSRN: https://ssrn.com/abstract=1350337

Nari Lee (Contact Author)

HANKEN School of Economics ( email )

P.O. Box 479
FI-00101 Helsinki, 00101
Finland

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