The Emergence of the Inter-Organisational Adversarial Network in Strategic Patenting

Much of the research on networks using patent data focuses on citations and the collaboration networks of inventors, hence regarding patents as a positive sign of invention. However, patenting is, most importantly, a strategic action used by companies to compete with each other. This study sheds light on inter-organisational adversarial relationships in patenting for the first time, with a specific focus on patent opposition. Patent opposition is a legal action that a company (or individual) can take to challenge the validity of a patent within a certain period (usually 6 – 9 months) after grant. If an opposition is ‘successful’, the opposed patent is revoked and cannot take effect in any of the signatories. Companies thus oppose patents owned by rival companies clearly intending to hinder their innovation activities.
We constructed and analysed the network of companies connected via patent opposition relationships that occurred between 1980 and 2018. The network comprises of 11,480 nodes (companies) and 26,433 directed edges (opposition relationships). We found that the network exhibits a heavy-tailed, power-law-like degree distribution and assortative mixing, making it an unusual type of topology compared to social networks with positive or negative relationships. We argue that adversarial (or rivalry) relationships are substantially different from positive or negative (e.g., dislike, conflict,…) relationships. A patent opposition occurs when the opposing company is aware of (and feel threatened by) the high value of a patent owned by the opponent company. Indeed, opposed patents tend to have a high citation counts, which is a widely used metric to capture the patent value. We identified a few triadic motifs in the opposition network (Figure 1), and further investigated how these patterns have emerged over time, by conducting a temporal network motif analysis [1], with patent co-ownership among the companies also considered. By regarding opposition as a negative relationship and co-ownership as a positive relationship, the results identified the ‘structurally imbalanced’ triadic motifs (in the context of the balance theory [2]) and the temporal patterns of the occurrence of triads formed by a mixture of these two types of relationships. Our findings indicate that the mechanisms of the emergence of the inter-organisational adversarial relationships may differ from those of other types of negative relationships hence necessitating further research.