James Conley and Peter Bican share the floor to explain the idea of value articulation, which they describe in detail in their piece with Holger Ernst. With the framework, the management of IP rights is explained within marketing constructs such as the unique selling proposition. The a

1. IP Management – Towards an Integrative Approach
James G. Conley
Kellogg School of Management,
Northwestern University, USA
j-conleya@kellogg.northwestern.edu
Peter M. Bican
WHU – Otto Beisheim School of
Management, Germany
peter.bican@whu.edu
Presented at the 2013 AoM PDW “Intellectual Property Management and Innovation Appropriation:
Towards a New Research Agenda,” Lake Buena Vista, FL
August 10, 2013

2. • Elements of Value Proposition
• Integration – Central Aspects
• The Value Articulation Framework
• The Dolby Case
• Case Summaries
• Discussion
Today’s Agenda
2

3. Expression
Brand
Function
Story
Source
Benefit
Elements of Value Proposition
3

4. Expression
Brand
Function
Copyright
Mark, Dress
Patent, TS
IP Regimes Reconciled
4

5. Brand
(Trademark)
Function
(Patent/Secret)
Story about
Benefit
Source of
Benefit
Technical
Benefit
Expression
(Copyright)
Unique Selling Proposition
Rosser Reeves circa 1960
IP Atomic Model and the Unique Selling Proposition
5

6. Integration – Central Aspects
• Understanding that IP includes a breadth of rights regimes such as patents,
copyrights, trademarks, trade dress, registered designs etc.
• Unique Characteristics of each IP regime such as lifetime of protection, the
requirements for ownership, exclusivity etc.
Patents Copyrights Trade
Marks
Trade
Names
17-20 years 70-100 years Indefinite
Life of Property Protection
Functionality
No FunctionalityHigh Functionality
© James G. Conley and Peter M. Bican, 2013.
All rights reserved.
6

7. Value
Time
Patent Value Trademark Value
Adopted from Keith Bockus, 2000
!!The dreaded “Shark Fin”
Curve!!
© James G. Conley and Peter M. Bican, 2013.
All rights reserved.
Value Transference: Dynamics of Value Transference
7

8. Value Translation
Extend to New / Emergent Markets
Expand in Existing Markets
Value Transportation
time
Initial
limited life
patent or
copyright
Options to
leverage
IPRs to
expand
current
market
share
and/or
facilitate
entry to
new
markets
The Value Articulation Framework (Conley, Bican and Ernst, 2013*)
© James G. Conley and Peter M. Bican, 2013.
All rights reserved.
*James G. Conley, Peter M. Bican & Holger Ernst (2013).
Value Articulation - A Framework for the Strategic Management of
Intellectual Property. California Management Review 55 (4): 102-120.

9. © James G. Conley and Peter M. Bican, 2013.
All rights reserved.
Source of Benefit
Copyright© Expression Original Expression
Scalable Media
Content
Derivative Use in New
Markets
Story about Benefit
Trademark®
Source
Identifier
Branded Offering Brand Expansion Category Extension
Technical Benefit
IP Right Uniqueness Value Transference Value Translation Value Transportation Impact / USP
Patent Function
Differentiated
Function
Incremental Product
Attributes
Technology Platform
Projection to New Markets
The Centrality of IP within the Value Articulation Framework (Conley, Bican and Ernst, 2013)
9

10. Case Study: Dolby Laboratories
From:
© James G. Conley and Peter M. Bican, 2013.
All rights reserved.
10

11. To:
Case Study: Dolby Laboratories
© James G. Conley and Peter M. Bican, 2013.
All rights reserved.
11

12. The Ray Story:
Case Study: Dolby Laboratories
© James G. Conley and Peter M. Bican, 2013.
All rights reserved.
12

13. Dolby Laboratories
1973: 2nd B-Type Patent
US3846719
1980: 1st C-Type Patent US4490691
0
100
200
300
400 1965
1975
1985
1995
2005
Global
Patent Appl.
as to Priority
Date
1965: A-Type Patent
1968: 1st B-Type
Patent US3631365
1966: & &
DOLBY System:
009 Electrical +
scient. apparatus
1970: &
DOLBY:
016 Paper goods
and printed matter
1968: Dolby B
Type for
Consumer
Market:
exclusive
License to
KLH
1977: Star Wars
breakthrough:
Dolby Stereo for
Prof. Film
SoundMarket
1966: Dolby A-Type
Noise Reduction
for Professional
Studio Recording
Value
Transportation
1970 Dolby
move into Film
SoundMarket
Patent
Appl.
© James G. Conley and Peter M. Bican, 2013.
All rights reserved.
13

14. 1973: 2nd B-Type Patent
US3846719
1980: 1st C-Type Patent US4490691
Dolby Laboratories
0
100
200
300
400 1965
1975
1985
1995
2005
Global
Patent Appl.
as to Priority
Date Patent
Appl.
1965: A-Type Patent
1968: 1st B-Type
Patent US3631365
1966: & &
DOLBY System:
009 Electrical +
scient. apparatus
1970: &
DOLBY:
016 Paper goods
and printed matter
1995: Dolby
Digital: Move
to Consumer
“Home”
Market
1968: Dolby B
Type for
Consumer
Market:
exclusive
License to
KLH
1982: Dolby
Surround-
Stereo for
Consumer
Market
1977: Star Wars
breakthrough:
Dolby Stereo for
Prof. Film
SoundMarket
1966: Dolby A-Type
Noise Reduction
for Professional
Studio Recording
1992: Move to
Digital:
Batman
Returns: 1st
movie with
Dolby SR-D
(now: Dolby
Digital)
Prof. Film
Sound
1997: Dolby
Digital
mandatory for
DVD
Prof.
Recording
2000: Dolby
Headphones for
Consumer Market
Value
Transportation
Value
Translation
Total Revenue
in ‘000 USD
1970 Dolby
move into Film
SoundMarket
D
V
D
D
V
D
0
200
400
600
800
1,000
2009:
009 Computer software
platform
038 Providing online
telecommunications
services,
041 Entertainment
services
…for interactive online
gaming
2003: Acquisition of Lake Tech.
Ltd: developer of Dolby
Headphone technology
1978:
009 Electrical + scient.
apparatus
1985: DOLBY SURROUND:
009 Electrical + scient. apparatus
2007:
Dolby
3D
Digital
Cinem
a
Prof.
Film
Sound
1992:
009 Electrical +
scient. apparatus
1995:
009 Electrical +
scient. apparatus
1999:
009
Electrical&
scient.
apparatus
Nr. of Patents
featuring
“Digital”
© James G. Conley and Peter M. Bican, 2013.
All rights reserved.
14

15. 1973: 2nd B-Type Patent
US3846719
1980: 1st C-Type Patent US4490691
Dolby Laboratories
0
100
200
300
400 1965
1975
1985
1995
2005
Global
Patent Appl.
as to Priority
Date Patent
Appl.
1965: A-Type Patent
1968: 1st B-Type
Patent US3631365
1966: & &
DOLBY System:
009 Electrical +
scient. apparatus
1970: &
DOLBY:
016 Paper goods
and printed matter
1995: Dolby
Digital: Move
to Consumer
“Home”
Market
1968: Dolby B
Type for
Consumer
Market:
exclusive
License to
KLH
1982: Dolby
Surround-
Stereo for
Consumer
Market
1977: Star Wars
breakthrough:
Dolby Stereo for
Prof. Film
SoundMarket
1966: Dolby A-Type
Noise Reduction
for Professional
Studio Recording
1992: Move to
Digital:
Batman
Returns: 1st
movie with
Dolby SR-D
(now: Dolby
Digital)
Prof. Film
Sound
1997: Dolby
Digital
mandatory for
DVD
Prof.
Recording
2000: Dolby
Headphones for
Consumer Market
Value
Transportation
Value
Translation
Total Revenue
in ‘000 USD
1970 Dolby
move into Film
SoundMarket
D
V
D
D
V
D
1978:
009 Electrical + scient.
apparatus
1985: DOLBY SURROUND:
009 Electrical + scient. apparatus
2007:
Dolby
3D
Digital
Cinem
a
Prof.
Film
Sound
1992:
009 Electrical +
scient. apparatus
1995:
009 Electrical +
scient. apparatus
1999:
009
Electrical&
scient.
apparatus
Nr. of Patents
featuring
“Digital”40,000100,000
120,000
161,868
289,041
391,542
482,028
719,503
922,713
955,505
Explicit
Licensing
Revenue: 2002
till 2011
Total Revenue in ‘000 USD
© James G. Conley and Peter M. Bican, 2013.
All rights reserved.
15

16. © James G. Conley and Peter M. Bican, 2013.
All rights reserved.
Company Product Value Transference Value Translation Value Transportation Business Impact
AstraZeneca
Pharmaceutical
preparations for
GERD and
heartburn, PPI
Patent on
Omeprazole
molecule,
trademarked as the
Rx Purple Pill Prilosec
Prilosec to Nexium, new
patent on compound; same
purple color on pill but w/
gold racing stripe accents
Entering the OTC market by
cooperating with P&G building on
FDA exclusivity (accrued from the
patents on omeprazole)
Sustained top line revenue (approx. $6
billion/year) in PPI category for AZ, even
10 years past patent expiry & generic
entry
Nespresso
Encapsulated
coffe&machines;
portioned coffee
segment
Patents on capsule
and machines under
the Nespresso home
enjoyment TM
Advancing into coffee
machines accessories under
the Nespresso TM
Extending the coffee technology
platform into out-of-home coffee
experience via hospitality/office
Substantial growth to more than CHF 3
billion in 2011
Dolby Lab.
Professional and
Consumer
Sound
enhancement
A-type noise
reduction patent
trademarked w/ DD
and "Dolby"
Noise Reduction Film Sound
to Stereo Film Sound
Technique, protected by
proprietary patents
Cooperate with movie studios to
extend sound enhancement from
the "Analogue World" to the (w/
addtional) patents protected “Dolby
Digital” World
Sustained revenue growth between
2001 and 2011 (10X)
Monsanto
Herbicides and
Seeds
Patent on Glyphosate -
an agricultural
herbicide - to
RoundUp TM
Use new patents/packaging
to move RoundUp to all
market segments,
professionals or green thumb
garden hobbyists
Combine powerful RoundUp TM w/
patented advances in biogenetic
engineering & strategic M&A to
market “RoundUp Ready” branded,
herbicide resistant seeds
Transformed itself from a herbicide
manufacturer to the high yield seed firm
at the heart of global agribusiness
Apple
Digital Music,
Smartphone
iTunes utility
patents/iPod design
patents to iPod TM &
product marks
Upgrade software utility and
expand product design (both
involving new patents) to
modified products e.g. Mini,
Nano
Using powerful i**** TM, new
developed patents and dominant
design capabilities (patent
protected) to contract into the
mobile phone space
Sustained top line revenue growth since
2001 over all segments from iPod to
iTunes to iPhone to iPad to iCloud etc.
Disney
Entertainment
Media
Copyright on stories &
characters to
trademarks on
characters
Advancing derivative
copyrighted works within the
media space
Contract the Disney copyrighted
characters and TMs into new
markets like merchandise, health
care products and consumer
durables etc.
Disney Consumer Products generates
$28.6 billion in licensed product sales
annually (Nr.1 in the world), compared
to global box office sales of $31.8 billion
(2010).
Value Articulation - Case Summaries
Selected Case Studies (Conley, Bican and Ernst, 2013)
16

17. © James G. Conley and Peter M. Bican, 2013.
All rights reserved.
Discussion
The Value Articulation Framework…
• … is complementary to other contemporary innovation
strategy frameworks such as the ‘blue/red ocean’ and
the ‘three horizon’ frameworks,* but…
• ... differs in that the role of all the IP regimes and their
utility as management levers is central to the
articulation construct.
• … advances a fresh and integrating perspective about
pursuing and leveraging intangibles such as IP to realize
sustainable competitive advantage in almost any
market environment and or resource based disposition.
* See with W. C. Kim and R. Mauborgne, "Blue Ocean Strategy: From Theory to Practice,"
California Management Review, 47/3 (Spring 2005): 105-121; Mehrdad Baghai, Steve
Coley, and David White, The Alchemy of Growth (New York, NY: Perseus Publishing, 2000).
17

18. © James G. Conley and Peter M. Bican, 2013.
All rights reserved.
Discussion
Integration of IP
• Integrated view using multiple IP regimes increases firms’
competitive advantage.
• Trademarks could serve as a good indicator, for example illustrating
the process of value transference, translation and transportation.
• Access to sophisticated data has improved, for example patent and
TM data at the USPTO -> further avenues for empirically testing the
integration of IP and its impact
• Implementation of a cross-functional management approach: IP
needs to be plucked from the jaws of engineers and lawyers.
• Value Articulation Strategy work requires input from top
management (Top-Down?).
• Create a culture of IP awareness and IP-related matters being well-
integrated into the firm’s processes.
18

19. © James G. Conley and Peter M. Bican, 2013.
All rights reserved.
Discussion
Further Research Questions
• How to measure the interaction of integrative
activity?
• What are the interdependencies (if any) of
proactive patent/TM maneuvers?
• What hypotheses can be drawn from the
framework and its elements, and how could those
best be empirically tested?
• On what level could integration be tested?
Firm, product, individual/team (cross-functional)
level?
• Generalizability of theses tests?
19

20. Thank you very much!
Questions?
j-conleya@kellogg.northwestern.edu
peter.bican@whu.edu
20