The Modularity of Intellectual Property

• Applicant: Professor Dr. Joachim Henkel
• Subject Area: Accounting and Finance
• Term: from 2008 to 2009
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 70817322

• Final Report Year: 2010

Final Report Abstract

As planned, my coauthor C. Baldwin and I developed a theory of “IP Modularity” and identified and described a large number of examples from various industries. For that purpose, we conducted numerous interviews with practitioners and academics, spent long hours developing, refining, and formulating our concept, and did several test-runs in presentations at Harvard Business School, MIT, and Ross School of Management (Michigan, Ann Arbor). We call a particular module of a larger system “IP-modular” if all of its elements have the same or compatible IP status (that is, basically, license conditions). The module in question is then an “IP module.” If all of the modules of a system are IP modules, we say that the system as a whole is “IP-modular.” The advantage of IP Modularity is that it allows to treat each module in a way that corresponds best to its IP status. IP Modularity thus allows to reconcile conflicts between distributed value creation (by users, e.g.) and value appropriation, in that it allows to open up some IP modules for value co-creation by others and at the same time to keep other IP modules proprietary for value appropriation. Precondition for this approach to work is strong complementarity between the “open” and the “proprietary” modules.

Publications

• Design for appropriability – Modularity Induced by Intellectual Property. HBS/MIT Workshop on User and Open Innovation, Harvard Business School, Boston, 06.08.2008
  Henkel, J. , Baldwin, C.
  
• Design for appropriability – modularity induced by intellectual property. Jahrestagung der TIM-Kommission im VHB, Freiberg, 25.10.2008
  Henkel, J. , Baldwin, C.
  
• Design for appropriability – Modularity Induced by Intellectual Property. Strategy Brown Bag Seminar. Ross School of Business, University of Michigan in Ann Arbor, 24.07.2008
  Henkel, J. , Baldwin, C.
  
• Design for appropriability. Faculty Seminar Technology and Operations Management. Harvard Business School, Boston, 15.05.2008.
  Henkel, J. , Baldwin, C.
  
• Designing for appropriation: Intellectual property defines a third dimension of modularity. TIE Seminar, Massachusetts Institute of Technology, Sloan School of Management, 17.03.2008
  Henkel, J. , Baldwin, C.
  
• (2009) Modularity for value appropriation: Drawing the boundaries of intellectual property. Harvard Business School Working Paper 09-097
  Henkel, J., Baldwin, C. Y.
  
• Modularity for value appropriation – Drawing the boundaries of intellectual property. Topics in Open Innovation Seminar, UC Berkeley, 5.10.2009
  Henkel, J. , Baldwin, C.
  
• Modularity for Value Appropriation – Drawing the Boundaries of Intellectual Property. Workshop & Lecture Series on the Law & Economics of Intellectual Property, ETH Zürich, 10.11.2009
  Henkel, J. , Baldwin, C.