MANAGING INTELLECTUAL CAPITAL - LICENSING AND CROSS-LICENSING IN SEMICONDUCTORS AND ELECTRONICS

Innovation and the management of intellectual capital are playing an i ncreasingly important role in competition in high-technology industrie s. To operate in markets where innovation is cumulative, such as in el ectronics and semiconductors, firms frequently need to engage in exten sive licensing and cross-licensing. This need is amplified by recent i ncreases in the strength of patent protection and by the more active l icensing stance of intellectual property owners. A high-quality patent portfolio not only reflects the firm's inventive capacity, but may si gnificantly increase its cross licensing bargaining ability and reduce royalty payments. In addition, it may directly contribute to its prod uct and process innovation.