Intermediaries of IP Commercialization and Its Business Operation in Term Paper

Intermediaries of IP Commercialization and Its Business Operation in the Open Innovation, such as Non-Practicing Entities (NPEs - Term Paper Example The research and development team of organizations focus on developing and fabricating creative ideas that can help the company in coming out with a product that meets the evolving need of the customer and more. While in the recent past most organizations operated on the principle of closed innovation that required the companies generate, develop, and market their own ideas, the past few years have witnessed a dramatic shift towards open innovation model where the companies â€Å"commercialize external (as well as internal) ideas by deploying outside (as well as in-house) pathways to the market† (Chesbrough, 2003, p36). This new model has gained wide popularity owing to its wider perspective and application that allows companies to create value through an open culture and closer integration with its surrounding environment. Open innovation model is based on free flowing knowledge and information sources that contribute to value addition for both manufacturers as well as end co nsumers. While the model does allow businesses to utilise and exploit new opportunities, the challenge lies in tapping key knowledge resources and expertise that have the potential to generate profitable ventures. The closed innovation business model applied strict controls over its intellectual property rights (IPR) and the management focused on guarding its IPR to prevent competitors from stealing their innovative ideas. But in the age of open innovation model, businesses focused their strengths on commercializing their ideas and allowing its competitors to use their IP and purchase other firms IP to improve profitability. The organizational strategies today work on defining new strategies that enable them to exploit the open innovation model for creating new ventures and expanding their existing scope of markets and revenue towards potential revenue addition sources. The focus is to utilise their existing resources and technologies to accomodate innovative ideas that open new sou rces of market capturing strategies and expanding operational scope (Chesbrough, 2003). The key issue that arises from the open innovation model is the protection and commercialization of intellectual property (IP) and the different intermediary channels used for this purpose. It must be noted in this context that IP is an intangible asset that is not only difficult to valuate but also involves a lot of legal risks. There are number of intermediary channels that enable easy and smooth transaction of IP between innovators, funders and prospective users who develop products based on the IP. The paper provides a deeper insight into the operations and mechanisms of these intermediary channels that cash in on firms looking for IP that creates new opportunities in an open innovation environment. Intellectual property – the concept Before going into the details of IP intermediaries and its commercialization aspects it is important to understand the concept of intellectual property a nd its basics. Intellectual property can refer to any innovative idea and this idea has the potential to