The role of patents in business ecosystem's coordination: how do leader firms maintain technological knowledge and create new trajectories?

This paper aims at explaining how a leader firm is able to manage the successful coordination of a Business Ecosystem (BE) by strategically managing its patents. From this perspective, patents are not only used as an "exclusion" and innovation protection tool but more as a new way to coordinate and secure BE. We show that thanks to an active licensing-out strategy to subcontracting SMEs a leader firm can ensure the stability and sustainability of the BE. Indeed the firm gives the opportunity to its subcontractors to exploit the patents and develop new products applied to new markets and consequently develop new businesses. So far, they maintain technological knowledge but also create unanticipated technological trajectories by enabling new potential applications. In this sense, the coordination of a BE through the management of IPR is also at the root of specific new uses of technologies, highly dependent on the context. The emerging literature on the determinants of technological change shows that radical innovation is not necessarily linked to an endogenous evolution of an industry. Indeed, radical innovation in an industry may result from the deviation of the technological trajectory of another industry. Technological exaptation or pre-adaptation indicate a generating entrepreneurial activity of technological innovations through the redeployment of an existing knowledge base for unanticipated applications. In this sense, entrepreneurs are trying to find new markets for their technologies instead of seeking new technologies to their markets. However, this literature has mainly studied technological exaptation at the firm level and remains silent on the inter-firm level. According to the Open Innovation paradigm (Chesbrough, 2003) innovation is increasingly an open process that leads to purposive inflows and outflows of knowledge. These flows rely on an active management of Intellectual Property Rights (IPRs) thanks to an extensive licensing strategy that improve innovation beyond firms' boundaries. However this paradigm mainly focuses on a transactional approach of IPRs management and underestimates its collaborative dimension. The emerging literature on BEs mainly stresses this collaborative perspective of innovation and outlines how the convergence of industries conducts to the need for new coordination logics. In this perspective, BEs are particularly relevant, as the concept has precisely emerged to highlight new coordination and interactions logics between heterogeneous actors linked by a common fate. Some studies on BEs addressed this issue of the need for new coordination logics by emphasizing on the powerful coordination role of leader firms within an ecosystem. Other research has looked to the importance of coordination mechanisms and tools such as physical platforms (e.g. IT solutions) or intellectual ones (e.g. patents) to understand why BE are valuable for innovation and for its coordination processes. However this rich literature does not specifically focuses on the way IPRs may be used within BEs. So far, there is little discussion regarding the possibility that patents, although usually seen as a "protection tool" can be used by leader firms with the objective to coordinate and manage a BE and how this can influence BE's survival and performance and what are the implications in terms of technological change. In article we address the question of how the sustainability of an ecosystem can be achieved and how does new technological trajectories can emerge through IPR management? We propose that both leader firms' coordination role and coordination tools are important but we suggest that above all it is how such tools are mobilised in the coordination process that is interesting in order to understand BE development and survival. This conducted us to propose a framework showing a number of insights into the coordination mechanisms of a BE: we show that through a relevant management of patents leaders firms can secure a BE and protect their partners' development from external threats and they are able to support upstream partners who are the most dependent and the most vulnerable through the grant of some of their patents' operating licences. This study further demonstrate that leader firms of a BE need to adopt a proactive patent management approach in order to help their partners overcome external threats encountered while at the same time taking into account these partner's specificities and conjectural needs. We also provide an illustration of the relevance of patents for successful BE's coordination and management. So far we show that while ensuring the stability of its BE the leader firm also create new unanticipated technological trajectories. In what follows, we situate our research question in the connexion the limits of works on technological exaptation and business ecosystems. In a second point we introduce the literature on open innovation and patents management as framework which will help us to provide answers to our research question. Then, we present our research setting and results. Finally, we conclude with a discussion and conclusion.