Contextual Factors Affecting Decisions About Intellectual Property Licensing Provisions in Collaboration Agreements for Open Innovation Projects of Complex Technological Organizations

Abstract

Firms collaborate with partners in research and development (RD (2) Company foreground IP; (3) Collaborator background IP; (4) Collaborator foreground IP; (5) Joint background IP; and (6) Joint foreground IP. The Company needs to make different decisions for each category of IP.The main IP licensing elements in our proposed framework consist of exclusivity, geographic scope, field of application, time frame, sub-licensing scope, and level of compensation. In addition, we have identified nine contextual factors as follows:(1)Participation of Collaborator in Company's activities outside the project boundary;(2)Centrality of the technology to the Company;(3)Ease of substituting Collaborator's technology (modules) in the project with other technologies of third parties;(4)Type of Collaborator based on market intents;(5)Type of Collaborator based on business purposes;(6)Number of collaborators in the project;(7)Share of financial investment in the project;(8)Involvement of any third party in the Company's activities that require the relevant Collaborator IP; and(9)Level of IP management capability of Company.Our proposed IP access and licensing solutions inside and outside the boundary of a collaborative project are drawn from our literature review. They will be tested and refined through future empirical research with large international companies in complex technological industries. The final decision regarding IP access and licensing solutions for each project may be reached by considering the combination of different solutions in particular categories of the contextual factors of a specific collaborative project. The project manager or IP manager may reach that decision by either a managerial judgment path or a quantitative scoring path.In conclusion, our proposed framework may act as a rubric to help project managers or IP managers make decisions about designing and configuring IP access and licensing solutions in any collaborative research project by answering the two main questions: (1) Does the Company need to grant a license to the Collaborator for using the Company background and foreground IP or not? If yes, what is the scope of the license? and (2) Does the Company need to acquire a license from the Collaborator for using the Collaborator background and foreground IP or not? If yes, what is the scope of the license? A set of critical IP access and licensing elements and a strategic set of contextual factors have been identified for this purpose. Each category of the contextual factors affects the decisions about background and foreground IP access and licensing solutions inside and outside the project boundary in different ways. As a result, we have demonstrated an example of how the framework can be implemented in practice, in which the final decisions can be made either by managerial judgment or quantitative scoring. In our future research, we plan to test and elaborate the framework by using empirical evidence from large international companies in complex technological industries. Ultimately, our framework may be applied to any complex technological organization that needs to manage IP in research collaborations associated with the development of complex technological products.