Annals of Business Administrative Science
Online ISSN : 1347-4456
Print ISSN : 1347-4464
ISSN-L : 1347-4456
The False S-curve Shaped by Licensing Agreements
Masamichi OGAMI
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JOURNAL OPEN ACCESS

2015 Volume 14 Issue 6 Pages 351-364

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Abstract

According to Foster (1986), technological progress naturally forms an S-curve. However, this study examines the progress of manufacturable sheet glass thickness using the float process and reveals that license agreements with grant-back clauses shape technological progress, indicated by an S-curve. More specifically, a competition for development was generated among licensees of the float process during the initial phase of licensing. Progress accelerated in the range of thicknesses in which plates could be manufactured. Nonetheless, at the end of license terms when parties are aware of expiring patents, research and development is suppressed due to grant-back clauses. This occurred because the parties attempted to outflank the competition after patents have expired. Thus, technological progress halts; however, this is a false S-curve that is not based on natural law. In fact, in the case of a float process, technological progress began once again after patents expired.

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© 2015 Global Business Research Center

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