Contract Negotiations in Inter-Organizational Collaborative Projects for New Product Development: An Intellectual Property Rights Management Perspective

Inter-organizational collaboration for new product development is increasing all over the world due to soaring Research and Development costs, and the uncertainties posed by the new technological products and processes, companies are reluctant to spend all their in-house resources and are searching for new strategies for innovation , like inter-firm technological collaborations. The main advantages of such collaboration are as follows:  Strategic planning  Risk and Cost sharing,  Alternative technological solutions,  Complementary resources,  Joint learning But there are certain disadvantages that are related to inter-organizational collaboration, some of which are as follows:  Suppression of alternative RD  The risk of creating dependencies between parties;  The risk of leakage of proprietary knowledge(strategic Intellectual Property) through other partners Intellectual Property is a strategic asset to a company not only providing technological competence, but also increases the reputation of the company along with the provision of tradable assets. Hence nurturing and protection of IP is very crucial for an industry to excel in its field. But inter-organizational collaboration create a paradoxical situation regarding IP, as all partners wish to expose as little of their in-house IP for new product development but reap the IP benefits of the developed product as much as possible. The main focus of the master thesis is on the risk of leakage of propriety knowledge, which relates to the IPR management in inter-organizational collaboration. The scope of the thesis in focussed on the contract negotiations process that leads to a developer agreement between the collaborating parties for a new product development. The main objective of the research is to manage the conflicting situation of cooperation and competition in collaborative projects with the development of a process design for IPR management during contract negotiations. The research is based on a framework called the 'Design Science‘ approach. The design science is an iterative process that takes business needs of the organization as an input to build a solution or recommendation, based on the knowledge base available on the state-of-the art methods, and which is to be improvised(which will be the scientific/research contribution) to tackle the specific problem/s of the organization. The developed solution (which is referred as design) is evaluated and refined based on the evaluation results After the research overview is presented, the case-study provided by the Company A is discussed in detail, and the various challenges faced in that real time collaborative project are studied and taken as an input for designing a process for contract negotiations Several interviews with IP Managers, project managers and Engineers were conducted to identify the business needs of the Company A with respect to the IPR management related to the contract negotiations in collaborative projects for new product development with external partners. Also a comprehensive literature search was performed to have a knowledge base of the requirements for a successful IPR management not only limited to contract negotiations. Based on the pointers received in these interviews and references from literature a comprehensive survey was conducted among several employees in various global offices of company A to test the generality or locality of the problems related to IPR management, and several key factors were identified as the most influential criteria for IPR Management in contract negotiation, which are as follows: The IP Organizational structure of Company A  IP Awareness of the Project team members that are involved in the contract negotiations  Trust and common Understanding together with Due Diligence The relevance of these criteria to contract negotiations is explained in detail, with further knowledge from literature and exploration of the actual scenario in the business environment , with the help of workshops, questionnaires etc. After gathering insights from the literature and the exercises in the business environment, a process design is developed for IPR Management in contract negotiations. The process design is based on the design science framework and hence requires continual improvisation. Hence the design and evaluation of the process is not sudden but iterative. The first process design illustrating the base line process which is improvised to a desired process for contract negotiations, which is further improvised to a process with role descriptions, and this model is finally improvised to a comprehensive BPMN model. Business Process Modelling Notation (BPMN) is a global standard to design business processes and activities. At each of the improvisation iterations, the model is evaluated and the feedback received is incorporated in the subsequent iteration and the final process design is evaluated in the same way along with its effect on the key factors identified. The final process is divided into four stages such as  Estimation Phase  Preparation Phase  Negotiation Phase  Execution Phase These phases are explained in detail in order to address the problems identified in the beginning of the research and are designed to be adherent to fulfil the identified criteria such as IP awareness, Trust etc. The concluding chapter provides answers to the research questions posed in the beginning of the report, and concludes the master thesis with the following recommendations to the company A. The Organizational structure of Company A has to be made visible, supportive and top-down in nature, with the involvement of at least few high level administrative personnel  The IP awareness among Engineers has to be increased with training programs, IP Coaches, workshops and job rotation  The importance of trust and common understanding with due diligence has to be emphasized heavily among the project team members involved in collaborative projects with external partners and they should be trained in negotiation skills  Project plans should be modified to allot specific time and resources for IPR Management during for the contract negotiations, and the documentation of the process has to be standardized , in order to simplify the task for a new project team that takes over the project.