Shadow of joint patents: Intellectual property rights sharing by SMEs in contractual R&D alliances

At the end of the collaboration process, alliance partners must share the intellectual property rights. Joint patenting is not necessarily the first choice for collaborating firms. The reasons why some firms decide to share foreground intellectual property rights under joint patents whereas others do not remain unclear. Through the lens of game theory, this paper examines the effects of cooperation attributes on the decision by SMEs to use joint patenting. Hypotheses are tested on a sample of 74 biopharmaceutical R&D alliances. The results show that joint patenting may be designed to hold the parties hostage. In other words, it is a way to ensure partnership continuity.