All or nothing: International coalitions responding to competing pressures in challenges to IP rights

Abstract

Foreign subsidiaries face ‘institutional duality’ from competing parent-firm and host-country conformity pressures. However, international coalitions of firms experience pressures to conform from multiple parents, resulting in ‘institutional multiplicity.’ We argue that coalition members bargain and satisfice to agree upon goals and responses to external pressures. As institutional multiplicity increases, coalition responses are increasingly framed around simple threshold-type goals all members can agree upon. We test this idea in the context of international coalitions challenging biotechnology and organic chemistry patents of competitors in the United States Patent and Trademark Office's Patent Trial and Appeals Board. Our analysis includes 946 observations, and finds that larger coalitions with greater variance in member home-country patent enforcement institutions are more likely to pursue strategies that have a simple performance goal all members can agree upon: having a competitor's patent invalidated instead of a settlement. This relationship is further enhanced when coalition members have diverse levels of strategic interest, captured by variance in portions of coalition members' overall patent portfolios belonging to the same patent family as the disputed patent.