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Integrated marketing communications in the commercialisation of

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Article  in  International Journal of Intellectual Property Management · January 2014

DOI: 10.1504/IJIPM.2014.062793

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Int. J. Intellectual Property Management, Vol. 7, Nos. 1/2, 2014 47

Integrated marketing communications in the

commercialisation of intellectual property

R. Harrer*
Vienna Trading House,
Kaiserstrasse 91/31,
1070, Vienna, Austria
E-mail: rh@viennatradinghouse.com
*Corresponding author

Maximilian Lackner
Institute of Chemical Engineering,
Vienna University of Technology,
Getreidemarkt 9/166,
1060, Vienna, Austria
E-mail: maximilian.lackner@tuwien.ac.at

Abstract: Integrated marketing communications (IMC) is an approach to

increase sales of a product by concerted actions in various promotional
channels that achieve synergy. IMC has been applied extensively to consumer
products. This paper shows that IMC is a valuable tool for the
commercialisation of intellectual property (IP), e.g., patents and know-how, in
a business to business (B2B) setting, that is for the commercialisation of
patents and other types of IP. The value of IP depends strongly in its perceived
value or utility for the business-customer, which can be conveyed in an
advantageous way bv IMC. Hence, this paper addresses a new strategy for the
successful commercialisation of IP. Patent marketing can increase the value of
a patent or patent portfolio can be significantly. The business case is the central
building block for IMC of intellectual property (IP). An important aspect for
inventors is to keep in mind that it is not the technical sophistication of their
innovation which brings them success, but its market. Marketing is a key for IP
commercialisation.

Keywords: marketing communication; patents; know-how; intellectual

property; technology marketing.

Reference to this paper should be made as follows: Harrer, R. and Lackner, M.

(2014) ‘Integrated marketing communications in the commercialisation of
intellectual property’, Int. J. Intellectual Property Management, Vol. 7,
Nos. 1/2, pp.47–56.

Biographical notes: Roman Harrer has studied economics at the University of

Vienna. His PhD thesis is about complementary and alternative strategies for
the commercial intellectual property rights transfer. He has been a marketing IP
for more than a decade.

Maximilian Lackner studied technical chemistry at Vienna University of

Technology, where he also obtained his Habilitation in Chemical Engineering.
He holds an Executive MBA from LIMAK JKU University. He has founded

Copyright © 2014 Inderscience Enterprises Ltd.

48 R. Harrer and M. Lackner

four companies and filed several patents. He is a member of the advisory board
of the Association of German Engineers (VDI Austria East) and an advisor to
the US Department of Energy.

1 Introduction

The American Association of Advertising Agencies (also 4A’s) has defined integrated
marketing communications (IMC) as “an approach to achieving the objectives of a
marketing campaign through a well-coordinated use of different promotional methods
that are intended to reinforce each other”. IMC has been used extensively for the
synergistic advertising of products mainly to consumers (Chitty et al., 2011; Schultz
et al., 1994). Traditionally, especially companies with high costs for research and
development (R&D) and subsequent patenting such as players the pharmaceutical
industry have relied on IMC (Gibson, 2003).
Companies have recently changed their patenting strategy from filing a ‘single patent’
to registering a portfolio of patents. Thus, quantity has gained in importance over quality
[van Pottelsberghe, 2009, p.23]. Glazier (2000) [quoted in van Pottelsberghe (2009,
pp.23–24)] provides a list with possible objectives management may pursue in their
portfolio patenting approach. One of the objectives may be to generate additional
revenues through the monetisation or commercialisation of IP. According to Drucker
(2001), by and large, innovations which refer to the company’s core business will be
largely used by the company itself, whereas innovations which are not directly related to
the company’s core business are likely to be commercialised. Other objectives may be to
hide an essential invention or to avoid possible litigation.
In addition, companies may create patent portfolios to be perceived as an important
innovator on the market. To put it differently, their portfolio strategy has an important
communicative function. In particular, their objective is to enhance the company’s image
[Glazier (2000), quoted in van Pottelsberghe (2009, p.24)].
Nevertheless, van Pottelsberghe (2009, pp.20–23) views the flood of patents in
Europe detrimental to the patenting industry as it produces an increasing backlog of
pending patent applications in all major patent offices. van Pottelsberghe (2009, p.20)
uses the term global patent warming for this new development.
As a matter of fact, intellectual property (IP) shows many of the typical features of an
industrial product, which is defined as a product “purchased for further processing or for
use in conducting a business” [Kotler and Armstrong, (2012), p.251].
Note, however, that the purpose of a patent or a trade secret strategy can be broader,
e.g., to prevent a competitor from market activity. In the end, the aim is to have a
competitive advantage or a unique selling proposition, which is crucial, since know-how
can be duplicated virtually endlessly.
In addition, like most products, whether consumer or industrial, they need to be
marketed to prospective customers. Hence, the traditional marketing mix concept that
includes the management of product, price, promotion, and place/distribution, also
applies to IP. Indeed, the importance of marketing in the innovation process has been
affirmed by several authors. For example, O’Neill and Garner (2010a, p.43) state that
“innovation covers the whole journey from the idea, to the practical implications, and
 Integrated marketing communications 49

marketing”. Along the same lines, according to the World Intellectual Property
Organization (1997, p.3), the innovation process consists of the following four stages:
1 idea generation and conception phase
2 development and design phase
3 prototype and pre-production phase
4 production, marketing and commercialisation phase.
They argue that the crucial stage is the fourth stage, that is the production, marketing and
commercialisation stage.
Now, let us take a closer look at the marketing management of IP from a ‘traditional’
marketing point of view. For that purpose, we need to consider the ‘four Ps’ of marketing
(product, price, promotion, and place), see, e.g., Kotler (2003).

1.1 Product
First of all, although IP, viewed as a ‘product’, has many properties in common with
many other tangible commodities or products, as mentioned above, there is a fundamental
difference; a particular IP may be used simultaneously by several people and, thus, can be
sold or licensed at the same time to different companies [World Intellectual Property
Organization, (1997), p.4].
Moreover, it is extremely difficult to define the added value of a particular IP product.
By contrast to consumer products, such as cars and cell phones, and other industrial
products, like machines and tires, it is extremely difficult for a buyer of a patent, or
license, to assess the utility of a particular IP.
This difficulty is not only rooted in complex and complicated technology being
disclosed; the very purpose of IP is to prevent others from using it, and the assessment is
always rooted in scenarios. Different scenarios can be evaluated and simulated for their
outcomes, however, one can never be sure about the outcome. What is more, in IP one
typically does not deal with bilateral relationships, but with multilateral ones instead, and
one does neither know the full range of competitors nor all one’s customers well, so
creating “what if” scenarios is a tricky and highly uncertain task.
To put it differently, the utility of a particular IP remains largely individual; it
evidently depends on how and, most importantly, how effectively the purchaser is going
to use the patent or license. The difficulty in defining the added value of an IP ‘product’
is even enforced by the fact that patents are never ‘self-explanatory’. Patent specifications
are usually kept both very general and ‘cryptic’ and, thus, their possible ways of
commercialisation cannot be immediately identified on the basis of their specification.
Generally, any IP product can be defined by the following equation:
Product = R&D efforts + IP rights (not always patentable)
+ know how (trade secrets) + business case + marketing

What is more, in order to increase the chances of successful commercialisation of

innovation extensive market research has to be carried out to find out about customer
needs, market size, barriers to entry, etc. In other words, both qualitative and qualitative
research must be conducted to get detailed customer insights [Watkins, (2010), p.190].
For that purpose, the development of a more proactive approach is required; investors and
50 R. Harrer and M. Lackner

businesses must cooperate at an early stage in the product development process in order
to increase commercial success [Allen, (2010), p.17]. In particular, O’Neill and Garner
(2010a, p.48) suggests that design experts need to be involved early in the innovation
process since designers’ input and expertise can have an essential influence on the
product’s potential functionality and value in the marketplace. Moreover, O’Neill and
Garner emphasise that all design elements, like brand name, product form, as well as
marketing, must be consistent in style and message.

1.2 Price
Closely connected to the question of the nature of a particular IP product is that of its
price. It also remains difficult to set a price as it is heavily contingent on the purchaser’s
individual case. There exist various evaluation methods; for example van Pottelsberghe
and van Zeebrock (2008) presented a Scope-Year Indicator for the European patent
system, which uses the average duration and average geographical scope of a patent to
determine its value. Nevertheless, the product serves as a yardstick for the price and can
be approximated in a thoroughly devised business case.
Royalty rates are negotiable. They tend to depend on the industry and its specific
gross profit margin, see Figure 1.

Figure 1 2007 reported royalty rates and gross profit margins (see online version for colours)

Source: KPMG International (2012)

With these figures, it is possible to estimate the value of a patent, a method commonly
used by patent attorneys.
Furthermore, for the distribution, or marketing, both push and pull strategies can be
applied. A typical push strategy used by an innovator would be to actively seek
prospective buyers by calling upon companies, exhibiting one’s innovations at trade
shows, or commission brokers to help them market their innovations. In contrast,
 Integrated marketing communications 51

pursuing a pull strategy may involve using patent office data banks and the internet while
promoting one’s company as an essential player on the innovation market to encourage
potential buyers to contact the innovating company. In practice, you will find companies
employing a combination of both strategies at the same time.

1.3 Promotion
Finally, for the promotion of an organisation’s innovation a specific marketing
communications mix may be designed, which may consist of advertising, sales
promotions, public relations, and personal selling. It is important to recall that the
activities of the aforementioned four promotional tools usually overlap and cannot be
always clearly assigned to any of the four [Pickton and Broderick, (2005), pp.16–18]. For
example, a business case which is presented in an appealingly designed file and shows
the company’s logo and corporate colours, represents both an advertising and public
relations activity. The reason is that it advertises the innovation, and, at the same time, it
promotes the company as an important innovator, that is, it serves a public relations
purpose. However, there might be good reasons for a patent holder not to brand his IP,
since this might indicate that it is not his core business or a slow moving good.
There is a fundamental controversy about secrecy with IP. In the first place, R&D
activities are carried out clandestinely, and the findings are kept secret on case one opts
for trade secrets versus patents. However, at some point in time, one has to leave the
laboratory and disclose some information in order to find a paying customer or purchaser.

1.4 Place
The place, the fourth element of traditional marketing, addresses the question of launch
and customers. In the case of patents, the key decision is which type of potential buyer or
licensee is being pursed.
A peculiarity with IP is that for most innovations, there is either a world market or no
market at all.
However, the patent system is still working in a territorial fashion, although a system
by branches of industry would be more suitable. In essence, it is the market which
determines the success of any product. This is a no-brainer, however, inventors tend to
value their innovations by their high level of technical sophistication. Any innovation
only turns into a success when it finds a market. More often than none, not the technically
best solution wins the race. There is no such thing as Darwinian evolution in the IP
business. Inventors need to understand very clearly that it is the market which is of
utmost importance.
Hanel (2006) reviews IP and business management practices.

1.5 Types of IP
IP is a legal concept that creations of the mind need to be recognised and deserve
exclusive rights. The concerned intangible assets are pieces of music, literature, artistic
work, discoveries, inventions, logos and designs. Common types of intellectual property
rights (IPR) include patents, copyrights, trademarks and trade secrets.
In this paper, the focus lies on technical inventions and innovative concepts.
52 R. Harrer and M. Lackner

There are two fundamentally different approaches to protecting IP: either patenting or
keeping one’s know-how secret. For the commercialisation of IP, patents are easier to sell
than know-how. In many cases, though, it will be a combination of both.
After having pointed out some particularities of IP marketing, it is important to
mention that in order to ensure effective marketing communications an integrated
approach must be chosen.

1.6 Approaches to IP commercialisation

One can distinguish between the use of IP internally, e.g., a pharmaceutical company as
patent holder that manufactures and distributes corresponding products, and the use of IP
by third parties, i.e., a buyer of patents or a licensee. In the latter case, individual
inventors or patent holding companies try to commercialise their assets, which can be
patents, know-how or a combination of both.
Note that there are other variants, such as patent trolls, too.
R&D-intensive companies try to maximise their benefits from IP, both developed
internally and purchased from the market.
Pénin (2012) describes that patents are used strategically in markets for technology.
Strategic and operational patent management is reviewed by Ayerbe and Mitkova (2011).
Individual inventors, on the other hand, often lack knowledge and experience in
marketing their IP. They can turn to specialised service companies and agents.
Welfens (2008), for instance, found out that the marketing of patents by technology
transfer offices (TTO) of universities is weak: While the three top US universities
generate revenues of 15% from patents and licensing, the leading German universities are
around 2% revenues. See also Braun and Hadwiger (2011) who discuss the knowledge
transfer from research to industry.
Mitkova (2005) found out that marketing is a key element in patent management. Her
work puts forward the hypothesis that in a situation of strong competition a patent is no
longer simply a legal protection of an invention, but also a strategic tool in the market.
Therefore, appropriate marketing management allows companies to optimise the
registration and exploitation of patents.

1.7 Integrated Marketing Communications (IMC)

Hence, a better strategy is needed to communicate and capture the value of one’s IP. It
can be covered by IMC.
IMC is defined as “the process of integrating all the elements of the promotional mix”
[Pickton and Broderick, (2005), p.25]. IMC can be understood as concerted action of
various marketing approaches that create synergy (Du Plessis et al., 2005; Percy, 2007).
Nevertheless, integration does not refer to the homogeneity of communications [Pickton
and Broderick, (2005), p.26]. The goal is to create synergy effects by combining “the
various facets of marketing communications in a mutually supportive and enhancing
way” so that “the resulting ‘whole’ is more than the simple sum of its parts” [Pickton and
Broderick, (2005), p.27]. What is more, marketing communications objectives must be
clearly determined and in conformity with other organisational goals [Pickton and
Broderick, (2005), p.26].
The following 4Cs of IMC must be achieved in promoting IP to benefit from the
synergies of integration [Pickton and Broderick, (2005), p.28–29]:
 Integrated marketing communications 53

• coherence – logically connected; firmly stuck together

• consistency – not self-contradictory; in agreement, harmony, accord

• continuity – connected and consistent over time

• complementary communications – producing a balanced whole; supportive

communications.
In relation to coherence, for example, the execution of product tests may follow logically
from the business case and must be carried out as provided for in the business case.
Moreover, consistency of the organisation’s communications can be ensured by choosing
a sales force that perfectly matches both the innovation to be marketed and the corporate
image. A major problem, which often occurs at such presentations, is that company
representatives do not accurately tailor their presentation to their audience, who may
come from a huge range of backgrounds (technicians; marketing, financial, operations
officers, etc.). Hence, communication experts from specialised agencies may be
commissioned for the presentation of a business case. In addition, companies involved in
the commercialisation of innovations and innovative concepts must show continuity in
how they are perceived by their prospective customers. In other words, their image must
be consistent over time. Last, but not least, there are many other issues of communication
which an organisation may not pay sufficient attention to. Examples are the choice of the
appropriate location for the presentation or product presentation, use of academic titles
and wearing the right clothes in interpersonal communication, employment of media,
culture-bound behaviour, etc.
Kietzmann and Angell (2014) discuss the role of generation C (creative customers) in
a world of IPR. It is argued that their interaction can result in controversies that need to
be addressed.

1.8 The intricacies of patent marketing

There exist several differences in marketing a conventional product ‘to touch’ and IP.
Whereas marketers are able to slightly modify a product or service to fit it to a certain
target customer, the object in IP marketing cannot be changed in any way. That is, a
patent is fixed.
Secondly, patents are often complex, and their utility needs to be communicated very
clearly. Potential customers will often not be able to spot the advantages of an innovation
over other solutions, and worse, they will not find it by themselves.
Third, there is a tight window of opportunity. IPR have an expiration date (generally
20 years in the case of patents). As far as individual inventors are concerned, they need a
licensee or buyer within one year of filing their application, since this is the time when
high costs for nationalisation arise and a decision has to be taken of whether to further
pursue the patent or to let it fall.
Lastly, patent marketing has many options, such as exclusive or non-exclusive
licenses. Being tied up with a wrong partner destroys value for the IPR holder (Lackner
and Harrer, 2014).
Inventions can be grossly undervalued. Examples where people take inventions for
granted are eyeglasses, roads, keys (Boyd and Goldenberg, 2013).
54 R. Harrer and M. Lackner

IP commercialisation typically is a business to business (B2B) transaction. Compared

to marketing communications towards consumers, more focus has to be placed on facts,
where a business case is of critical importance (Probert et al., 2013).

2 IMC for patents – a strategy for inventors and patent holding companies

No invention will be discovered by potential buyers and licensees themselves. The IP

holder needs to take action in the marketing of his rights in order to gain value. An IMC
approach for patents is centred around a solid business case for the innovation.
The business case will address the state of the art, the unique selling proposition
(USP) of the innovation, the production costs, the target customers and the value to the
customer. Note that there can be several business cases for one invention or patent,
differing by geography, scope, application, etc.
To ensure the effectiveness of communication, an IMC approach must be chosen.
Key elements for IMC of IP are, apart from a solid business case:
• clear communication of the value for the customer
• testimonials and/or third party test reports
• A working prototype.
Individual inventors should seek professional support in marketing their patents, as this is
typically not their strength.
Activities to promote IP are, depending on available budget:
• participating in inventor fairs and trade shows
• consider an upstart company around the invention
• online marketing activities such as a dedicated website, social media or email
marketing (Ivanov, 2012)
• traditional advertising such as direct mails.
A note on social media: Unilever’s campaign for Dove ‘The Dove Real Beauty Sketches’
obtained over 54 million views on YouTube (Dove, 2013). Brand management is
strongly affected by social media (Gensler et al., 2013). Also, there are successful cases
of inventors using crowd funding for the furthering of their ideas.

3 Conclusions

IMC, a marketing strategy that has proven successful for consumer products, is well
suited for the commercialisation of patents. Despite popular inventors’ belief, the crucial
element of commercial success with IP is not the invention as such, but its market.
The business case is most important as it answers the question of the utility it
represents for the prospective buyer and defines the market value. Above all, it promotes
the product and has an important communicative function. The business case ideally has
to be supported by testimonials and a working prototype to gain maximum value. Private
inventors should seek professional assistance to market their innovations. Corporations
 Integrated marketing communications 55

can market their patents outside their core business for an additional stream of revenue.
Using IMC for patent commercialisation is particularly important when technology
intensive products are concerned, as their benefit for customers often is not obvious and
needs to be communicated clearly to realise the full potential.

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