Playing in between: Ip brokers in markets for technology

This paper focuses on IP (Intellectual Property) brokers. We define IP brokers as public or private companies bridging supply and demand of intellectual capital. We will here argue that IP brokers represent a key player in the market of patents, as their role in technology transfer can be that of active “market makers.” This paper is organized in three sections. The first section discusses how economic and sociological theories explain brokerage and its existence. We discuss how, according to these different perspectives, brokers are adding value to IP transactions. The second section investigates what brokers really do. This analysis is based on a set of semi-structured interviews with the leading IP intermediaries in the U.S. Main results suggest brokers not only provide a support function for IP transaction, but also play an active role in the creation of market opportunities. In other words, brokers do not simply exploit quasi-rental structural position created by temporary market imperfections, but are crucial in making patent transactions possible. They do not only “stay in between” supply and demand of innovation, but “play in between” by acting as entrepreneurs of complex transactions. The third section discusses the implications of the study and elaborates on possible research hypotheses both at a micro and macro level. At the micro level, we suggest that brokers can be treated as highly skilled entrepreneurs with relevant relational capability. At the macro level, we predict that structural conditions of the industry and technological field where IP brokers are active will impact the success and relevance of intermediaries activities. The paper concludes with the role brokers play on the innovative capabilities at a national level and investigate specific conditions that might produce unexpected consequences.