Effective patents (applicable for bringing profits) are more likely to encourage licensing among firms short in assets than firms that occupy them (Arora &Ceccagnoli, 2006). In this regard term “complementary assets” is embedded, that generally means other sources of knowledge and development that allow a firm to compete on the Market. Thus, Teece , (1986) argues that licensing is mainly recommended if the innovator enjoys strong patent protection and lacks complementary assets such as manufacturing and marketing. The principal notion that is deducted from Teece's (1986) study is that access to complementary assets is difficult - they cannot be lent, and it takes lot of financial resources and time efforts receiving them. However, by comparing number of patents and related license agreements we claim to detect or deny competition patent protection strategy, and in the last case we would point to the strategy of active application of complementary assets (manufacturing of generics and marketing in the form of brand names).

Another work on a company's assets and its efficiency is discussed mentioning of complementary assets (e.g., market related knowledge, product reputations, distribution channels, and customer contacts) as an additional source of advancing technology and capabilities of a firm to bring new benefits to the market (Nerkar&Roberts, 2004). Regarding the successful implementation of “generic” strategy, it is argued that it could be naturally entered through market and could be valuable for a firm, however “their strategic importance would be limited” (Barney, 1991).

Non-patent means of protection

Except patents there are other valuable means of IP protection that likewise used in pharmaceutical industry, for instance, trademarks (registered trade names of products), and trade secrets, that do not have to be officially publicized (i.e. confidentiality agreements). Ordinarily, such methods also regarded essential for protection of pharmaceutical inventions, however the influence of trade secrets is more difficult to evaluate without conducting a special survey. Consequently, we could not detect the strategies of IP protection other than patents and trademarks since there is no official data source for trade secrets, for example.

Also other formal protective rights are mentioned as trademarks, utility patent, design patent, copyright, as well as informal or contractual protective strategies: measures to keep personnel long-term, confidentiality, time lead over competitors, exclusive customer relationships, form of contracts with suppliers (Blind et al., 2006).

The strategy that outlined by the method of joint applications is discussed in another peer-reviewed article, mentioning the evolution of nature of patenting (Ron, 2012).

Trademark protection offers opportunity for building reputation of the product and firm on the market, because generics are unlikely to compete on grounds of drug's activity and effectiveness. Thus, trademarks present a key value for companies in terms of brand recognition and differentiation of products (Tuominen, 2011).

Turning to the exploration of types of IPR protection strategies, the most applied is comparison between acquiring of patent protection or trade secret status. Most of the papers are devoted to foreign industries, however theoretical ideas could be implemented to the realities of Russian industry too. “The decision to use secrecy rather than patent may be explained by the legal uncertainties surrounding IP rights. The legal process is a major source of costs and uncertainty, mainly because the scope and the validity of the patent may be questioned at that time” (Crampes& Langinier, 2002; Lemley&Shapiro, 2005). The under-funded Patent Office reviews the patent application for an average of 18 hours before deciding whether or not to grant the patent” (Lemley et al., 2006).

In the very recognizable paper on technological innovation Teece refers to the most common type of legal instruments: patents, trade secrets and copyrights, relating it to the nature of technology: product, process, tacit or codified (Teece, 1986). Linking this concept with the appearance of pharmaceutical industry the “regime of appropriability” could be identified, pointing to the environmental factors that form the latest.

Approaching specificities of medicine and pharmaceutical industry the process of IPR protection takes a special place. On behalf of conceptual findings there are debates over social and economic explanation of IPR protection: business groundings meet its opponents from the social welfare advocates, thus the balance between economic value for the developer and moral issues is one of the numerous unsolved dilemmas (Cerón& Godoy, 2009).

Types of novelty of medicines

It is also vital to briefly determine main types of innovation in pharmaceuticals, what further will help with the analysis of the scope and importance of patented invention of Russian pharmaceutical firms. Incremental innovation is featured by enhancement of already existing medicines or “expanding therapeutic classes to increase therapeutic efficacy, safety, and quality” (Innovation in the Biopharmaceutical Pipeline: A Multidimensional View, 2013).

For example, expanding of treatment area of existing drug could be reached by changing the dosing requirement for patents. Such innovation often ensures that reasonable dosage of a drug is used for each treatment case (IFPMA, 2012). “Additionally, despite the type of patent's improvement, whether it is new improved formula, expansion to an existing therapeutic class, or a newly identified medicinal use, incremental innovation involves the same R&D and clinical trial inputs as first-in-class medicines'' (IFPMA, 2010). Types of pharmaceutical innovation: incremental, radical and revolutionary are explained in Figure 4. According to the studies, relative number of first-in-class products is lower than products with incremental changes (2012-2016). However, incremental innovation could be definitely significant as such inventions could enhance properties of existing medicines and increase options for patient's treatment. That is why we should pay attention to the detailed description of patented inventions.

Regarding evaluating of presence and types of IPR strategy protection, the main goals and missions of pharmaceutical companies, provided on their web-sites or other sources of official information, are also highly important. For instance, a company that mainly seeks to raise its profits usually tends to register incremental inventions (Who, 2007). Our of this type of alterations the “secondary” patents strategy revealed when protection is seek to cover protection on several features of a single commercial drug after acquiring a patent on the active ingredient. “Secondary patents may cover peripheral features such as a tablet coating, an intermediate product that naturally results after ingesting the drug, or methods of use; it could also include a different dosage or delivery route” (Ho, 2015). This strategy is widely called “evergreening” in literature devoted to patent's strategies. Moreover, patent application of such nature not only restrain competitors from entering the same area, but pending patents also lower the information disclosure of patent portfolio (Jell, 2011)

Definitions of breakthrough and incremental innovations are used in the overview of shift from individual single breakthrough patents to patents of single patentee that are incremental in essence. Mentioned cluster of patents (Ron, 2012) or patent portfolios (Parchomovsky&Wagner, 2005) had gained an increased value over a single patent of single inventor, especially in pharmaceutical industry.

Strategies of IP protection

In this section different opinions on types of IP protection strategies will be gathered and at the end presented in the form of a picture. Despite the fact that no officially established or recognized IP strategies exist, commonly, options are reduced to several basic varieties.

Intellectual property is interesting to be analyzed in terms of practical positioning within IP Management in innovative firm. Patenting inventions are most commonly associated with establishing exclusivity for an inventor, and also on a more global scale allowing to make particular person or entity be responsible for potential damages (Roemer-Mahler, 2013). Other explanation of importance of intellectual property protection lies within concept of defense against the counterfeiting: defense of a new idea and its commercialization on a priority basis (Participation on the Market and bringing back investments that were spent on R&D are also essential motivation for IPR protection)

(Cohen et al., 2000).

Patent - as discovered in one of the research papers - is a probabilistic right. The incentives to get a patent can be explained by the desire of protection of new developed technology and its sole commercial usage for some period of time. When one makes an application, it is also a disclosure of the technology in exchange of potential acquiring of a right (Roemer-Mahler, 2013).

Still, patents are considered as foremost method of protection in pharmaceutical industry, several other management strategies are proposed to enhance the profit utilization of company's product portfolio. As Cohen et al., (2000) states “such strategic motives as blocking competitors, enabling cross-licensing, and forearming against infringement suits” may be more efficient in following the protection motives. Among strategies of patent protection pending applications are also considered as patent strategy of a firm, thus constraining rivals from fast decisions, and bringing more uncertainty to similar players (Jell, 2012).

Significance of collaboration between firms that may be captured by presence of co-assignees and joint patent application should point to the industry important inventions as firms share expenses for resource allocation and R&D activities. Such are considered as industrially valuable because joint work may be a sign of exchange of important resources that are not available within the firm limit, and even in case possible negative effects of collaboration, competition capabilities are enhanced (Petruzzelli et al., 2015).

Focusing on patent application strategies, some authors simply define it according to different patent dimensions, like: domestic applications, applications abroad;

The dimensions of successful IP management strategy are discussed in the paper devoted to the effective IP strategies in biotechnology sphere, however, some aspects could be applied also for pharmaceutical industry:

(i) Protection optimisation - sharply, “defend ownership and deter competing technology”;

(ii) Maximal value extraction - executing license agreements and law protection of an invention, and

(iii) Alignment with the commercial strategy - evaluation whether IP assets fit in the stated strategic objectives and mission of a firm (Lerer&Bowman, 2011).

A study was conducted via analysis of UK and US pharmaceutical firms in order to investigate the situation over market of generic drugs and strategies of R&D-based companies that invest a lot of money in pharmaceutical innovations. As a result, large R&D-based companies have started to diversify their business with regard to both product portfolio and geographical target markets (Roland Berger Strategy Consultants, 2010). Diversification strategy, including entering the market of generics (by acquiring other forms, building own venture, or partnering) is another path mentioned (Roemer-Mahler, 2010).

So-called “evergreening” strategy mentioned similarly as “follow-on patents” related to desire of an inventor to extend the protection period of its product/process and restrain producers of biosimilar drugs to occur on the market after patent's end. Therefore, assignees do not tend to claim for a broad protection in one application: reciprocally, they “thicken” the original application with followed innovative variations of initial patent. This strategy is referred to defensive strategies and treated as a very important method particularly for pharmaceutical industry (Tuominen, 2011).

Patent strategies are also evaluated through the relation of domestic applications and applications abroad. Such quality determinants are under investigation: the existence of collaboration in patent development, the number of claims, the scope, and the novelty, with the existence of forward citations the patent received (Haley&Haley, 2012).

More generally, the evaluation of patenting strategy (in particular) is identified in the article contributed to studies on the patent portfolio analysis, its indicators, methods, etc. As Grimaldi et al., 2014 define, four types of patenting strategy categorized by strategic positioning are:

o Competitive: patented inventions play a defensive role of the competitive position on the market;

o Business: protection of products relevant for the leading business of a company;

o Defensive: patent protection is exercised in order to limit competitors from market entry, creating strategic difficulties/barriers;

o Not essential: patenting with the sole aim of maintaining reputation on the market (Grimaldi et al., 2014).

Determining strategies in sphere of patenting and trademarking, the next general aspects of IP strategies could be determined: good data on IP protection strategies in pharmaceutical industry is presented on the WIPO web-site, where it is stated that creating an IP portfolio, protecting it and exploiting is incredibly important in forming investments in budget and market opportunities (Intellectual Property Rights for SMEs in the Pharmaceutical Industry, n.d.).Cited web-source relates to the sphere of IP in biotechnology, and lists some components of IP strategies, that in successfully developing firm are all engaged:

-IP Protection strategy (various aspects of patent protection)

-IP exploitation strategy (commercialization, license agreements, cooperation agreements, strategic alliances, cross-licensing, etc)

-IP monitoring (search of the patent and trademark databases on potential contractors and infringers)

-IP enforcement strategy (arbitration and mediation).

The current research implements two first constituents of this offered insight, as only IP protection and exploitation strategy could be detected from the analysis of patent and trademark information, in order to answer the research question of this Study.

Obviously, there are other IP strategies not included in the scope of this Research because they are simply unavailable for identification with our methodology, i.e. compensation payments for generic companies in order to delay their entering of the market, different agreements, employee's policy, etc. In the Master Thesis we compare the official information of companies to the reality of their activities and performance that are analyzed by data on the patent applications, trademarks, and partly on cooperation and license agreements.

Findings

IPR strategy:

defensive patent strategy;

extensive competitive trademark strategy;

General: business strategy

Case 2. «Valenta»

Company Overview

From the information of official web-site of a company holders of Pharmacy Chain 36.6 launched «Veropharm» as pharmaceutical manufacturing subsidiary with the largest in Russia retail chain of the same name (Company profile, Veropharm, 2016) Three manufacturing plants are in possession of «Veropharm»: in Belgorod, Voronezh and Pokrov, what is important, european norms of GMP and ISO 9001 are implemented here.

Mainly the production of «Veropharm» is oriented on the national market, however, a representative office was opened in Ukraine in 2004. Furthermore, some offices in other CIS countries are planned to open.

«Veropharm» is considered as “the largest domestic producer of oncology drugs and plasters in Russia” (Aston Consulting, 2012). According to the official information (Aston Consulting, 2012), «Veropharm» holds about 300 generic medicines in its product portfolio. «Veropharm» cooperates with South Korean firm LGLS: a license for production of innovative antibiotic drugs “Factive” brand was acquired, that designated to Russia and the CIS areas.