Abstract

The importance of information systems (IS) and information technology (IT) as strategic business tools has been widely acknowledged by both practitioners and academics. Hence, researchers have long been interested in the business value of IT and its influence on gaining and sustaining competitive advantage. Many claim that IT is subject to easy duplication and lack of protection and therefore sustained competitive advantage from IT is not a reality. However, other researchers have been able to show that the strategic use of IT applications can lead to longer term superior performance. Business method patents could be the missing link between the strategic use of IT and sustained competitive advantage. These patents have become much more valuable and enforceable in recent years providing protection for the patent owner that has not been considered by academicians. In this study, 40 patenting firms were matched with 40 nonpatenting competitors and their performance was compared in order to explore patent- protected IT-enabled sustained competitive advantage. The ownership of business method patents was not found to be a significant contributor to competitive advantage. However, patent-owning firms that were able to gain an initial performance improvement were more likely to maintain that advantage over time.

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