Faculty Scholarship

Document Type

Article

Publication Date

Fall 1-1-2012

Abstract

Disruptive innovation can be described as the introduction of a new conceptual idea or meme into an existing system that causes the system to be fundamentally altered. Assembly lines, air conditioning, digital film, and personal computers represent such innovations, all of which led to fundamental paradigm shifts. The convergence of globalization, a networked economy, and digital technologies have made disruptive innovation a threat in almost every industry. Changes to publishing, music, and television distribution – along with the rise of social media – highlight this transformation, but they are not alone; manufacturing, retail, payment systems, transportation and other industries are struggling with volatile upheaval caused by such change. Disruptive innovation, however, follows predictable patterns. Investors can anticipate these shifts if their financial transactions are properly structured and effectively documented. The model requires a holistic intellectual property approach which looks beyond just patents. It must explicitly incorporate the underlying meme, and it must account for the inflection points in the transformation pattern. Utilizing this model, inventors, private equity investment structures and established firms can maximize value and promote innovation. This article provides an overview of disruptive innovation from examples of the past decade, identify the underlying patterns of change common to disruptive innovation, highlight strategies to mitigate disruption for existing industry, and address the intellectual property securitization aspects to structure effective deals for both the investors and innovators.

Publication Title

Northwestern Journal of Technology and Intellectual Property

Publication Title (Abbreviation)

NwJTechIntellPropiii

First Page

441

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