Bhaskarabhatla, A. and Hegde, D. (2014). An Organizational Perspective on Patenting and Open Innovation Organization Science, 25(6):1744--1763.

Achange in U.S. patent law in the early 1980s increased the value of patents, particularly for firms in the electronics and semiconductors industry, yet many of the industry{\textquoteright}s leading firms did not embrace patenting after the change. We show through an in-depth study of International Business Machines (IBM), the world{\textquoteright}s largest patentee, that the company{\textquoteright}s practices during much of the 1980s discouraged patenting. IBM adopted pro-patent management practices in 1989 after the installation of a new research and development head and in the face of faltering financial performance. IBM{\textquoteright}s increased patenting and licensing activities improved its financial bottom lines but curtailed its industry-wide knowledge spillovers. These causes and consequences of pro-patent practices are visible in several other large U.S. corporations. Thus, in the context of the {\textquotedblleft}patent explosion{\textquotedblright} of the 1980s, we show that intraorganizational forces such as inertia, financial pressures, and new leadership shaped established firms{\textquoteright} uptake of pro-patent management practices and their success. Our findings also suggest that pro-patent practices associated with {\textquotedblleft}open innovation{\textquotedblright} may stem the free flow of knowledge across organizational boundaries.