Chapter 3: Sharing Intellectual Property Rights in Contractual R&D Alliances: Exchange Hazards and Cooperation

Why do some firms choose to share foreground intellectual property rights (IPR) through joint patents while others do not? Joint patenting often results from R&D alliances. Under joint ownership, the contracting parties share ownership of an asset and the property rights to it. A joint patent can therefore be considered a means to allocate appropriable control rights. However, these rights are owned by different entities. This creates boundary overlaps that go beyond temporary organizational ones. To understand IPR sharing, therefore, we must investigate boundary decisions. In this chapter, we look at joint intellectual property ownership by extending the perspectives—which have been used mainly to explain organizational boundaries—to the firm’s property rights boundaries. Although there are many reasons for a firm to set organizational boundaries, we focus on (a) exchange hazards regarding assetspecific investments and (b) cooperation motives. Our findings indicate that joint patent activity depends mainly on contextual factors such as partners’ technological portfolios and their anticipations of future interactions, rather than partners’ contribution.