Dear Enemy: Litigation and Cooperation in a Mobile Phone Standard Development Organization

Abstract

We study the impact of conflict on cooperation within wireless telecom standards development. There is limited systematic inquiry into inter-organizational conflict. The research on alliance management emphasizes mechanisms of formal and informal governance such as contractual terms and trust building as strategies to avoid cooperative failure. We build on and compare these insights with insights from evolutionary biology and collective action in repeated interactions to highlight strategic implications of conflict while competing for resources. We empirically analyze the effects of patent litigation events on cooperative efforts within the 3GPP standard-setting organization, which is the body that sets global standards for mobile communications. We find that, overall, litigation increases cooperation within litigating dyads, supporting the “dear enemy” view of strategic interaction, but it also shifts defendants’ cooperative efforts towards other firms in the network, as they may divert the technology away from the attacker. We also find that technological distance and relational resources moderate the results. Our findings hold implications for understanding the dynamics of cooperation in technological competition.