Earticle

Intellectual property portfolios are managed as a major investment method in firms as it provides strategic leverage on value creation to the firm. These potentially inimitable resources make Intellectual property management (IPM) issues strategically more attentive to firms in inspecting their portfolios for a better return on investment in technology and R&D. Taking market oriented view to these issues we investigate the firm value creation of IPM concentrating on cross licensing and patent exertion at occurrence of patent infringement lawsuit. We use event study methodology to assess the effects of the cross licensing and patent infringement on the stock market returns around the date of announcement. Results largely support our proposed hypotheses and shed new light on the factors associated with firm value creation of strategic intellectual property management. Our results provide the evidence that announcement of cross licensing make large effect on mutual parties engaged in a contract while the patent infringement announcements association with firm value shows insignificant statistical result demanding further investigation. The implications of the findings for research and practice are discussed.