However, despite the practical importance of external patent exploitation and the fact that many firms experience substantial difficulties in managing it (Rivette and Kline 2000), literature lacks empirical insights in how firms organize and implement their external patent exploitation. Extant literature is mostly limited to conceptual approaches (Grindley and Teece 1997) and anecdotal evidence (Kline 2003; Rivette and Kline 2000). Moreover, most studies adopt knowledge or technology as the unit of analysis within exploitation activities, including the exploitation of unpatented technology. Based on the findings of several studies claiming that the firms’ patent portfolios are often underexploited and hold significant unused commercial potential (Giuri et al. 2007; Rivette and Kline 2000; Elton et al. 2002), understanding external technology exploitation from a patent management perspective is an important gap in research. In particular, there is a lack of in-depth empirical insights into how firms actually manage their external patent exploitation.Consequently, this article aims to fill this gap by empirically investigating how firms manage external patent exploitation. Applying the concept of desorptive capacity as theoretical research setting (Lichtenthaler and Lichtenthaler 2009), we explore which factors influence the firms’ approach towards managing external patent exploitation. The concept of desorptive capacity was introduced to complement the well-known concept of absorptive capacity and describes the firms’ ability to externally exploit knowledge (Lichtenthaler and Lichtenthaler 2009). In the context of this article, desorptive capacity is understood as the firms’ ability to externally commercialize their patents, in other words their ‘‘external patent commercialization capacity’’. In order to answer the research question, the empirical analysis of the paper is based on data from fourteen firms of the pharmaceutical and chemical industry.