On-demand IP licensing for the digital economy

Abstract

The rise of the digital economy is causing a surge in Intellectual Property (IP) licensing as more and more IP assets are being incorporated into products and product service systems (PSS). Today’s IP licensing models possess rigid structures that put incumbent licensing parties at an advantage and imply large barriers to entry for innovative enterprises. This paper contrasts the traditional, predominantly lump-sum licensing models with fairer and more flexible models that could be enabled by automated licensing management systems. Thereby, we take a first step towards leveraging the potential of flexible IP licensing models to reduce the complexities, inefficiencies and trust issues inherent in IP licensing today. We discuss three different fixed and usage-based IP licensing models that we plan to test in a successive simulation study to more closely explore the economic implications of fixed versus usage-based IP licensing for the involved stakeholders.