Two essays on monetization of intellectual properties

Intellectual properties (IP), identified as intangible assets such as patents, trademarks, and copyrights have become one of the fundamental drivers of firm success. As they deliver long-term shareholder value and represent a source of sustainable competitive advantage firms make significant investments to generate and maintain their IP portfolios. US firms, for example, annually invest $1 trillion in intellectual property and over $4 billion to obtain and keep patents in force. Despite the increasing importance of and tremendous investments in IP, research on how firms monetize IP through marketing has received limited attention in the marketing literature. This is partly because many IP transactions are carried out indirectly through merger and acquisition, venture capital funding, and licensing activities. The marketing processes that are associated with these types of transactions are neither transparent nor readily observable. To fulfill this gap in the literature, this dissertation presents two essays that (i) determine the role of marketing on the monetization of IP, and (ii) formalize how IP are monetized by firms and examine the marketing drivers that affect monetization success. The first essay considers a specific case of IP direct marketing and examines the role that information presentation has on the monetization of IP. This study examines how marketing information presentation affects IP auction outcomes. This research expands the linkage principle concept (Milgrom and Weber 1982) by looking beyond the effects of information quantity to the effects of information presentation on auction outcome. This research involves a natural experiment where modifications to auction catalog information are observed over time and their effects on auction outcomes are evaluated. A content analysis is first performed to categorize the auction catalog changes in terms of importance and salience, and second, their effects on IP value are estimated using a mixed model. Results show significant effects of information organization on IP value, with organized information generating more revenue and selling more items. It also shows that these effects vary across industries, and also moderates the effects of over drivers of IP value. These results are further validated in a lab experiment to understand the underlying psychological process involved in the above phenomenon. The second essay uses grounded theory approach to identify marketing drivers that affect IP monetization success. Data is collected through telephone and on-site interviews of professionals from a large North American energy company that has a rich history of innovation and IP monetization. The interviews are audio-recorded and transcribed, and combined with related documents and information provided by the firm, to facilitate identification of key marketing concepts, themes, and relationships in the IP monetization process. The research uncovers five marketing drivers that affect IP monetization success: market promotion, market appeal, market network, star power, and technology maturity. A model is proposed in which star power and market network moderate the relationship between technology maturity and IP monetization success. These essays are highly relevant to marketing practitioners and business managers. IP management is complex, expensive, and consumes considerable management time. A better understanding of the marketing aspects associated with monetizing IP helps guide business strategies.