Innovation Strategy and Intellectual Property

Introduction

Entrepreneurship is not only the creation of a new organization; it is also the disciplined process of identifying, developing, protecting and commercializing new value. Innovation strategy connects an entrepreneurial firm’s creative activity with its competitive position. Intellectual property (IP) strategy determines which aspects of that value can be legally protected, how they can be controlled, and how they can be shared with partners.

Innovation may involve a new product, a different production process, a redesigned organizational architecture, a new revenue model, or a combination of these. Some innovations improve existing solutions gradually, while others transform industries. The entrepreneur’s strategic challenge is to choose the appropriate type and pace of innovation, allocate scarce resources across uncertain opportunities, and protect knowledge without preventing learning and collaboration.

This chapter examines major innovation types, diffusion and technology life-cycle concepts, open innovation, innovation portfolios, and the strategic use of patents, trademarks, copyright, trade secrets and licensing.

Learning Objectives

By the end of this chapter, you should be able to:

1. Distinguish incremental, radical, disruptive, architectural and business-model innovation.
2. Analyze innovation using diffusion and technology life-cycle frameworks.
3. Design an innovation portfolio under uncertainty.
4. Explain the rationale and risks of open innovation.
5. Select appropriate forms of intellectual-property protection.
6. Evaluate licensing, collaboration and commercialization strategies.
7. Address ethical, legal and governance issues in innovation management.

1. Innovation as a Strategic Capability

Innovation is the implementation and commercialization of a new or significantly improved product, process, marketing method or organizational method. An invention is a new technical or conceptual possibility; innovation occurs when that possibility is applied to create value. Entrepreneurship is therefore concerned with both novelty and adoption.

A useful strategic view treats innovation as a capability rather than a single event. The capability includes:

• sensing technological, social and market changes;
• selecting opportunities consistent with organizational purpose;
• developing and testing solutions;
• mobilizing financial, human and partner resources;
• protecting or sharing knowledge appropriately; and
• capturing value through sales, licensing, data, ecosystems or complementary assets.

An innovation creates economic value only when customers, users or other stakeholders adopt it. A technically superior product can fail because customers do not understand it, switching costs are high, complementary infrastructure is absent, or the firm lacks manufacturing and distribution capabilities.

Innovation and competitive advantage

Innovation can reduce cost, differentiate an offering, create a new market, increase customer retention, or alter the rules of competition. However, innovation does not automatically produce sustained advantage. Competitors may imitate it, suppliers may gain bargaining power, standards may change, or the innovator may be unable to scale.

The value of an innovation depends on at least four factors:

1. Customer value: the extent to which the innovation solves a meaningful problem.
2. Appropriability: the ability of the innovator to capture returns from the knowledge created.
3. Complementary assets: access to manufacturing, distribution, branding, data, finance and regulation.
4. Timing and adoption: whether the market and ecosystem are ready.

2. Major Forms of Innovation

The categories below are analytical distinctions. In practice, one innovation may belong to several categories simultaneously.

Incremental innovation

Incremental innovation improves an existing product, process or service without fundamentally changing its underlying technology or market. Examples include longer battery life, reduced production waste, improved user interfaces and more efficient logistics.

Incremental innovation is often based on customer feedback and operational learning. It normally carries lower technical uncertainty than radical innovation, but it can be strategically important because repeated small improvements accumulate. It is particularly suitable where customers value reliability, compatibility and gradual upgrades.

Radical innovation

Radical innovation introduces a substantially different technology, scientific principle or solution architecture. It may create new performance dimensions or make existing approaches obsolete. The development of commercial aviation, digital photography and mRNA vaccine platforms illustrates the broad idea.

Radical innovation involves high uncertainty concerning technical feasibility, regulation, customer acceptance and complementary assets. It can produce substantial advantage but often requires experimentation, patient capital and new organizational capabilities.

Disruptive innovation

Disruption is not simply a synonym for radical or technologically advanced innovation. In the classic theory of disruptive innovation, an entrant initially serves overlooked or new-market customers with an offering that may be simpler, cheaper or more convenient. It then improves and moves toward the mainstream, potentially displacing established firms.

An expensive premium product that immediately targets the most demanding customers may be radical but not disruptive. The distinction matters because incumbent firms often respond effectively to direct technological competition but ignore low-end or emerging-market opportunities.

Architectural innovation

Architectural innovation changes the relationships among components while leaving many components themselves substantially unchanged. For example, a firm may combine a familiar battery, software platform and sensor system in a new configuration. Architectural innovation can create new customer value while threatening firms whose knowledge is organized around an older system architecture.

Because existing components may remain useful, architectural innovation is often difficult to recognize. Organizations must examine interfaces, dependencies and system-level performance rather than focusing only on individual components.

Business-model innovation

Business-model innovation changes how an organization creates, delivers and captures value. It may alter the target customer, value proposition, revenue mechanism, cost structure, distribution channel or partner network.

Examples include subscription pricing instead of one-time sales, marketplace intermediation instead of inventory ownership, pay-per-use equipment, and advertising-supported digital services. Business-model innovation can be powerful even when the underlying technology is familiar. It may also create conflicts with an incumbent firm’s existing revenue streams, incentives and capabilities.

Social and frugal innovation

Social innovation addresses social needs through new products, services, processes or institutional arrangements. Frugal innovation seeks acceptable performance at much lower cost, often under resource constraints. These approaches are important in emerging markets and public-service contexts, where affordability, accessibility and sustainability may matter more than maximum technical performance.

3. Diffusion of Innovation

Diffusion theory explains how an innovation spreads through a population over time. Adoption depends not only on the innovation’s technical attributes but also on communication, social influence, perceived risk and institutional conditions.

Everett Rogers identified five perceived attributes that influence adoption:

• Relative advantage: perceived superiority over an existing alternative.
• Compatibility: consistency with users’ values, routines and infrastructure.
• Complexity: difficulty of understanding or using the innovation.
• Trialability: ability to experiment before full commitment.
• Observability: visibility of benefits to others.

The commonly described adopter categories are innovators, early adopters, early majority, late majority and laggards. These categories are not moral judgments. They indicate different risk tolerances, information sources and adoption conditions.

A product strategy should therefore vary across the diffusion process. Early adopters may accept imperfect products in exchange for novelty or strategic advantage. The early majority normally requires reliability, references, standards, training and clear economic benefits. The late majority may require low price, easy installation and strong social proof.

Diffusion is not inevitable. Network effects can accelerate adoption when the value of a product increases with the number of users, as in communication platforms. They can also create a difficult initial problem: customers may not join until complementary users or suppliers are already present. Entrepreneurs can address this through subsidies, interoperability, partnerships, standards or focused initial niches.

4. Technology Life Cycles and Dominant Designs

Technologies typically pass through stages, although actual patterns vary:

1. Emergence: experimentation is high, performance standards are uncertain and technical failure is common.
2. Growth: investment and adoption increase; firms compete to improve performance and establish positions.
3. Maturity: a dominant design or standard often emerges, competition shifts toward cost, reliability and scale.
4. Decline or renewal: demand falls, a substitute appears, or the technology is repositioned for a new application.

A dominant design is a configuration accepted by the market as the standard basis for future products. Once it emerges, firms can concentrate on process innovation, manufacturing efficiency and complementary services. Before that point, flexibility and experimentation may be more valuable than scale.

The technology life-cycle perspective helps entrepreneurs avoid two errors. First, they may invest heavily in a mature technology without recognizing substitution risk. Second, they may commercialize a promising technology before users, standards, regulation or infrastructure are ready. Strategic timing requires monitoring both technical performance and ecosystem development.

5. Innovation Strategy and Portfolio Management

Innovation projects differ in risk, time horizon, resource requirements and potential return. A portfolio approach prevents the firm from placing all resources into a single uncertain project or concentrating exclusively on safe improvements.

A practical portfolio may contain:

• Core projects: incremental improvements to current products and processes.
• Adjacent projects: extensions into related customers, channels or technologies.
• Transformational projects: opportunities that could create new markets or business models.

The balance depends on the firm’s financial position, capabilities, competitive environment and risk tolerance. A start-up may devote substantial effort to one transformational opportunity because focus is essential, whereas a diversified corporation may maintain several projects at different stages.

Portfolio decisions should consider strategic fit, technical feasibility, market attractiveness, protectability, capital requirements, time to evidence and learning value. Projects should not be evaluated only by early revenue forecasts, because forecasts for novel markets are highly uncertain.

Stage-gate and experimentation

A stage-gate process divides development into stages separated by decision points. At each gate, managers decide whether to continue, revise, pause or terminate a project. Evidence may include customer interviews, prototypes, technical tests, regulatory analysis, unit economics and pilot results.

Stage-gate discipline should not become bureaucratic rigidity. For uncertain innovations, small experiments and minimum viable prototypes can generate information before major commitments are made. The relevant question is not simply “Will this project succeed?” but “What is the least expensive experiment that will reduce the most important uncertainty?”

A simple expected-value model can support prioritization:

Here, p is the estimated probability of a favorable outcome, V is the value if that outcome occurs, and C is the cost of the project or experiment. The model assumes that value and cost are expressed on a comparable basis and that the probability estimate is meaningful. It is not a prediction formula; it is a decision aid. In real portfolios, strategic fit, timing, option value and interdependence must also be considered.

For example, a pilot costing $40,000 has an estimated 0.30 probability of producing benefits valued at $200,000. Its simple expected value is 0.30 × $200,000 − $40,000 = $20,000. The result supports consideration, not automatic approval, because the probability and valuation may be uncertain and the pilot may generate valuable learning even if commercialization fails.

6. Open Innovation

Open innovation is the purposeful management of knowledge flows across organizational boundaries. Firms may use external ideas, technologies, entrepreneurs, universities, customers and suppliers; they may also license, spin out or otherwise commercialize knowledge developed internally but not fully used.

Open innovation has three broad forms:

• Inbound: acquiring or integrating external knowledge.
• Outbound: allowing external parties to use internal knowledge through licensing, spin-offs or partnerships.
• Coupled: combining inbound and outbound flows in alliances, joint ventures, platforms or co-development.

Open innovation can reduce development time, broaden the search for solutions and access specialized capabilities. It also creates risks: confidential information may leak, ownership may be disputed, integration may fail, and the firm may become dependent on a partner.

Effective governance requires clear agreements covering ownership of background IP, ownership of new or foreground IP, confidentiality, publication rights, data access, milestones, liability, improvements, termination and dispute resolution. Employees and students should understand that information shared informally at conferences or online may affect novelty and confidentiality.

Crowdsourcing and innovation contests can generate ideas, but they require careful terms. A contest that claims unlimited rights to every submission may discourage skilled contributors and create ethical concerns. Transparent rules, fair attribution and proportionate rewards support participation and legitimacy.

7. Intellectual Property as a Strategic System

Intellectual property law varies by jurisdiction. Entrepreneurs should obtain qualified legal advice before filing, disclosing or licensing important assets. IP rights are territorial and usually require compliance with registration, renewal and enforcement procedures.

Patents

A patent grants a time-limited right to exclude others from making, using, selling or importing an invention, subject to the law of the relevant jurisdiction. Typical requirements include novelty, inventive step or non-obviousness, and industrial applicability or utility. Patentability standards and exclusions differ among countries.

A patent application requires disclosure of the invention in sufficient detail. The disclosure-exchange principle means that the inventor receives a limited exclusion right in return for public technical information. Public disclosure before filing may destroy novelty in many jurisdictions, although grace periods differ.

Patents are appropriate when:

• the invention is technically replicable by inspection or reverse engineering;
• the invention has substantial commercial value;
• the firm can afford filing and enforcement; and
• disclosure is preferable to secrecy.

Patents may be inappropriate where the invention is difficult to detect, rapidly obsolete, or better protected through secrecy. A patent is not a guarantee of commercial success or freedom to operate. A firm may own a patent and still infringe another party’s broader patent.

Entrepreneurs should conduct prior-art searches and, where relevant, freedom-to-operate analysis. Patent claims define the legal scope; a long specification does not necessarily create broad protection.

Trademarks

A trademark identifies and distinguishes the source of goods or services. It may consist of a word, logo, symbol, shape, sound or other legally recognized sign. Trademark strategy supports brand recognition, consumer trust and protection against confusingly similar uses.

Strong marks are distinctive and not merely descriptive of the goods. Entrepreneurs should search relevant registers and markets before investing in a name. Registration, renewal, appropriate classification and consistent use are important. Trademark rights do not generally protect the underlying technology or product idea.

Copyright

Copyright protects original expression fixed in a tangible or legally recognized form, including software code, written content, graphics, audiovisual works and certain databases. It generally does not protect an abstract idea, method, principle or business concept as such.

Copyright often arises automatically, but ownership can be complicated when employees, contractors, customers or collaborators create material. Written agreements should address assignment or licensing, moral rights where relevant, permitted uses and source-code access. Open-source software also carries license conditions that must be respected.

Trade secrets

A trade secret is confidential information that derives commercial value from secrecy and is subject to reasonable measures to keep it secret. Examples include formulas, algorithms, manufacturing methods, customer lists, pricing methods and training data.

Protection can last indefinitely if secrecy is maintained. Measures include access controls, encryption, need-to-know permissions, confidentiality agreements, employee training, exit procedures and information classification. Trade-secret law generally does not prevent independent development or lawful reverse engineering, depending on jurisdiction.

Design rights and other rights

Industrial design rights can protect the visual appearance of a product. Plant variety rights, semiconductor layout rights, database rights and geographical indications may also be relevant in particular sectors. The correct protection is determined by the asset, jurisdiction, commercialization plan and evidence required for enforcement.

8. Licensing and Commercialization

Licensing allows a rights holder to authorize another party to use IP under specified conditions. The licensor may receive an upfront payment, royalties, milestone payments, equity, cross-licenses or a combination.

Important licensing terms include:

• scope of rights and permitted field of use;
• territory and duration;
• exclusivity or non-exclusivity;
• minimum performance obligations;
• royalty base and audit rights;
• sublicensing;
• ownership of improvements;
• confidentiality and publication;
• quality control for trademarks;
• indemnities and liability; and
• termination and post-termination rights.

An exclusive license may motivate the licensee to invest heavily, but it can limit the licensor’s future options. A non-exclusive license may create broader market access but weaker partner commitment. Cross-licensing can resolve blocking positions, although it may raise competition-law concerns.

Entrepreneurs should distinguish ownership from freedom to operate. Owning a patent, copyright or trademark does not authorize all possible uses of the asset. Commercialization requires analysis of third-party rights, regulatory permissions, standards, data obligations and contractual restrictions.

9. Applied Case: MedLink Diagnostics

This is an illustrative case.

Background

MedLink Diagnostics, a university spin-out, develops a low-cost device that analyzes a small blood sample and sends results to a mobile application. The device combines an existing sensor, proprietary calibration software and a new cartridge design. Its intended customers are rural clinics and mobile health providers.

Problem

The founders must decide how to protect the technology, whether to collaborate with a medical-device manufacturer, and how to enter a market with strict regulatory requirements. They have limited funds and cannot file patents in every country immediately.

Analysis

The cartridge design may be patentable if it satisfies novelty and inventive-step requirements. The calibration method may be difficult to detect in use and could be protected as a trade secret, provided the company can restrict access. The software code and user documentation receive copyright protection, but copyright alone will not protect the underlying diagnostic method. The company name and product name should be cleared and registered as trademarks.

The device is an architectural innovation because it recombines familiar sensing and mobile technologies into a new system. It may also be a frugal innovation because its strategic value depends on acceptable performance at low cost. Adoption will depend on clinical evidence, health-worker training, reliability, interoperability and regulatory approval, not merely on technical novelty.

Approach and solution

MedLink should first document ownership of all university, employee and contractor contributions. Before public disclosure, it should conduct a prior-art search and obtain advice on a patent filing strategy focused on the cartridge and system claims. It should classify calibration parameters, manufacturing tolerances and clinical datasets, then implement access controls and confidentiality agreements.

The manufacturer should receive only the information necessary for evaluation under a non-disclosure agreement. A development agreement should distinguish background IP from jointly created foreground IP, specify regulatory responsibilities, and define improvements and manufacturing rights. MedLink could grant a field-limited license with milestones rather than an unrestricted exclusive license.

A staged portfolio would reduce risk: a technical validation project, a clinical and regulatory project, a manufacturing pilot, and a market-access pilot with selected clinics. Each stage would have evidence-based continuation criteria.

Outcome

In the illustrative scenario, MedLink secures early protection for its most valuable technical features, retains secret calibration knowledge, and uses a limited manufacturing partnership to reach regulatory testing. The staged approach preserves cash and reveals that training and cartridge supply reliability are more important adoption barriers than expected.

Learning points

1. Different assets require different forms of protection.
2. Patent protection does not replace regulatory and operational capability.
3. A partnership should be governed by precise IP and data terms.
4. Architectural and business-model choices can be as important as technical invention.
5. Portfolio gates should measure learning and risk reduction, not only immediate sales.

10. Ethical, Legal and Governance Issues

Innovation strategy has consequences beyond firm performance. Entrepreneurs should consider:

• Responsible use of data: consent, privacy, security, retention and secondary use.
• Algorithmic fairness: testing for discriminatory outcomes and documenting limitations.
• Safety: validation, monitoring, human oversight and recall procedures.
• Access and affordability: whether IP exclusivity prevents socially valuable use.
• Employee and community rights: fair recognition, compensation and ownership terms.
• Environmental effects: lifecycle impacts, repairability and resource use.
• Competition: avoiding exclusionary licensing, collusion or misuse of standards.
• Research integrity: accurate claims, reproducible evidence and disclosure of conflicts.

Generative AI creates additional questions about training data, confidentiality, authorship, software licensing and the reliability of generated material. Firms should prohibit the input of confidential information into unauthorized systems, document human contribution, review outputs for infringement and bias, and establish approval processes for high-risk uses. AI may accelerate ideation and prototyping, but responsibility for commercial and legal decisions remains with accountable people and organizations.

11. Best Practices for Entrepreneurs

A practical innovation and IP program should:

1. Link innovation objectives to a clear customer and competitive problem.
2. Maintain an invention and disclosure process before public release.
3. Map each important asset to the most suitable protection mechanism.
4. Search prior art, trademarks and third-party rights early.
5. Separate background IP, jointly developed IP and improvements in contracts.
6. Use experiments to reduce the most important uncertainties.
7. Balance core, adjacent and transformational projects.
8. Protect trade secrets through operational controls, not labels alone.
9. Review open-source and third-party license obligations.
10. Treat regulatory approval, manufacturing, distribution and service as complementary assets.
11. Monitor competitors, standards, technology substitution and customer adoption.
12. Reassess the portfolio as evidence changes rather than defending sunk costs.

Chapter Summary

Innovation strategy converts ideas and knowledge into customer and organizational value. Incremental innovation improves existing solutions; radical innovation introduces substantially different technologies; disruptive innovation often begins with overlooked or new-market customers; architectural innovation changes relationships among components; and business-model innovation changes how value is created, delivered and captured.

Diffusion theory emphasizes relative advantage, compatibility, complexity, trialability and observability. Technology life-cycle analysis helps firms recognize emergence, growth, maturity and decline, while dominant designs influence when experimentation gives way to scale and efficiency. Portfolio management balances core, adjacent and transformational opportunities and uses staged evidence to manage uncertainty.

Open innovation expands knowledge flows across organizational boundaries but requires careful governance of confidentiality, ownership, data and improvements. Patents, trademarks, copyright, trade secrets and design rights protect different assets and should be selected as a coordinated system. Licensing can accelerate commercialization, but scope, exclusivity, performance, royalties and improvement rights must be negotiated precisely. Ethical governance requires attention to safety, privacy, fairness, access, environmental effects and responsible AI use.

Key Terms

Innovation: Implementation of a new or significantly improved product, process, method or organizational practice.

Invention: Creation of a new technical or conceptual possibility.

Incremental innovation: Gradual improvement of an existing offering or process.

Radical innovation: Innovation based on a substantially different technology or solution principle.

Disruptive innovation: Innovation that typically enters through overlooked or new-market customers and later moves toward the mainstream.

Architectural innovation: Reconfiguration of relationships among existing or familiar components.

Business-model innovation: Change in how an organization creates, delivers and captures value.

Diffusion: The process by which an innovation spreads through a population or market.

Dominant design: A market-accepted configuration that becomes a standard basis for subsequent development.

Innovation portfolio: A collection of projects managed together according to risk, fit, timing and value.

Stage-gate: A development process in which continuation decisions occur at defined evidence-based gates.

Open innovation: Purposeful management of knowledge flows across organizational boundaries.

Patent: A time-limited exclusion right granted for a qualifying invention.

Trademark: A sign that distinguishes the source of goods or services.

Copyright: Protection for original expression fixed in a legally recognized form.

Trade secret: Confidential commercially valuable information protected through reasonable secrecy measures.

Licensing: Authorization to use intellectual property under agreed conditions.

Appropriability: The ability of an innovator to capture economic returns from innovation.

Complementary assets: Capabilities such as manufacturing, distribution, branding and regulation needed to commercialize innovation.

Freedom to operate: Analysis of whether a proposed activity can proceed without infringing third-party rights.

Review Questions

Short Answer Questions

1. What is the difference between an invention and an innovation?
2. Define architectural innovation and provide one example.
3. Identify the five perceived attributes that influence diffusion.
4. What is the main purpose of a stage-gate process?
5. Why might a firm choose a trade secret instead of a patent?

Long Answer Questions

1. Compare incremental, radical, disruptive and business-model innovation, explaining the strategic conditions under which each may be appropriate.
2. Explain how technology life-cycle analysis and dominant-design theory influence entrepreneurial timing decisions.
3. Discuss the benefits and risks of open innovation and propose governance provisions for a university–industry collaboration.
4. Compare patents, trademarks, copyright and trade secrets in terms of subject matter, disclosure and strategic use.
5. Explain how an entrepreneur can construct and manage an innovation portfolio under conditions of uncertainty.

Analytical / Application Questions

1. A start-up has a novel manufacturing process that competitors could not easily observe but a highly visible product design that competitors could copy. Recommend an IP strategy and justify the combination of protections.
2. A platform business has strong technology but few users and no established complementors. Use diffusion concepts to recommend three actions for overcoming the adoption barrier.
3. A potential licensee requests worldwide exclusivity in exchange for funding development. Analyze the risks and propose negotiation terms that protect the entrepreneur while preserving commercialization incentives.

Multiple Choice Questions with Answers

Question 1

Which statement best distinguishes disruptive innovation from radical innovation?

A. Disruptive innovation always uses more advanced technology than incumbents.

B. Disruptive innovation often begins by serving overlooked or new-market customers.

C. Disruptive innovation is limited to manufacturing processes.

D. Disruptive innovation cannot involve a business model.

Correct Answer: B. Disruptive innovation often begins by serving overlooked or new-market customers.

Question 2

Which innovation changes the relationships among components while leaving many components largely unchanged?

A. Incremental innovation

B. Architectural innovation

C. Trademark innovation

D. Diffusion innovation

Correct Answer: B. Architectural innovation

Question 3

Which diffusion attribute refers to the ability to experiment before making a full commitment?

A. Compatibility

B. Observability

C. Trialability

D. Complexity

Correct Answer: C. Trialability

Question 4

A project costs $40,000, has a 0.30 probability of generating benefits worth $200,000, and is evaluated using Expected value = pV − C. What is its simple expected value?

A. $20,000

B. $60,000

C. $100,000

D. $160,000

Correct Answer: A. $20,000

Question 5

Which is an example of inbound open innovation?

A. Licensing an internally developed patent to another firm

B. Acquiring an external technology for integration into a product

C. Stopping all collaboration with suppliers

D. Registering a company trademark

Correct Answer: B. Acquiring an external technology for integration into a product

Question 6

Which form of IP most directly protects a distinctive brand name or logo?

A. Patent

B. Copyright

C. Trademark

D. Trade secret

Correct Answer: C. Trademark

Question 7

Which condition is essential to maintaining a trade secret?

A. The information must be publicly disclosed.

B. The information must be subject to reasonable secrecy measures.

C. The information must always be registered internationally.

D. The information must be visible in the final product.

Correct Answer: B. The information must be subject to reasonable secrecy measures.

Question 8

What does freedom-to-operate analysis examine?

A. Whether a firm has enough employees to manufacture a product

B. Whether a proposed activity may infringe third-party rights

C. Whether customers prefer a particular trademark

D. Whether a patent is automatically commercially successful

Correct Answer: B. Whether a proposed activity may infringe third-party rights

Question 9

Which licensing term determines whether the licensee alone may use the licensed rights within the agreed scope?

A. Exclusivity

B. Royalty base

C. Publication format

D. Trademark distinctiveness

Correct Answer: A. Exclusivity

Question 10

Why should an innovation portfolio contain projects at different levels of risk and time horizon?

A. To eliminate the need for customer research

B. To guarantee that every project succeeds

C. To balance near-term improvement with longer-term opportunities

D. To avoid protecting intellectual property

Correct Answer: C. To balance near-term improvement with longer-term opportunities