R&D Cost Allocation and Income Sharing for Industry-University Cooperation in Open Innovation Context

Transcription

1 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. R&D Cot Allocation and Income Sharing for Indutry-Univerity Cooperation in Open Innovation Context Bao xinzhong, Dong yuhuan & Wang yan ABSTRACT Open innovation i one of the effective mode to promote the tranfer of univeritie reearch reult of intellectual property into the enterprie demand ide of intellectual property. Solving the cooperation mechanim and income ditribution problem of demander and provider of intellectual property i the key to guarantee long-term teady development of open intellectual property innovation. Thi paper tudie the cooperation mechanim problem of univerity and enterprie baed on game theory with income ditribution model a analyi thought. The tudy reult how: the demander of intellectual property promie to higher Tranfer payment proportion to provider of intellectual property in contract form, which can increae the overall return of open innovation; univerity and enterprie hould prefer collaborative innovation, becaue the intellectual property right innovation cale of the demander and provider of intellectual property when carrying out cooperative game i greater than that when carrying out non-cooperative game; reaonable ditribution can be carried out for exce earning produced from cooperation innovation baed on Rubintein ubgame perfect equilibrium reult. Keyword: intellectual property, open innovation, cot allocation, income ditribution, cooperative game Profeor, Mater tutor, Management College, Beijing Union Univerity, Beijing,100101,China. Potgraduate, Management College, Beijing Union Univerity, Beijing, , China. Potgraduate, Management College, Beijing Union Univerity, Beijing, , China. 11

2 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. I. Introduction The modern enterprie operating environment i increaingly preenting the dynamic nonlinear characteritic, which enable innovation reearch to how new open pattern by contantly breaking through enterprie boundary, and the traditional innovation model face enormou challenge uch a ever-accelerating innovation cycle, huge R&D invetment, and inefficient intellectual property tranfer. Given new innovation management theory and tool demand, international innovation reearch develop to the trend of globalization, R&D outourcing, early integration with upplier, uer innovation, etc., and all of thee trend hare the characteritic of open innovation. Henry Chebrough firtly put forward the concept of "open innovation", he pointed out that an organization hould not only make ue of exiting knowledge and creativity inide it, but alo draw leon from knowledge and creativity outide it to improve it core competence and enhance it innovation performance. 1 Baically, knowledge upply come from independent creation, external purchae and external cooperation. In the network environment, the intener the enterprie competition, the higher the implementation cot of project, the longer time ued, the higher the technical advancement, the more inclined it i to obtain knowledge from outide. Compared with cloed innovation, open innovation can horten innovation cycle, peed up the pace of innovation, reduce innovation rik and innovation cot, and increae innovation efficiency, in the intene competitive wave of globalization, open innovation i the neceary choice for organizational innovation. From the point of view of innovation reource, there are two baic paradigm of open innovation of organization, i.e. outide-inide "internally oriented innovation" and inide-outide "externally oriented innovation". The internally oriented innovation emphaize that the organization hould earch and acquire innovation reource outide of the organization, while the externally oriented innovation emphaize that the organization focue on puhing innovation reource of the organization to outide of the organization to rapidly realize the market value of innovation. Enkel, Gamann and Chebrough put forward the "mixed open innovation" baed on uch two baic paradigm of internally oriented innovation and externally oriented innovation, i.e. 3 the organization combine innovation reource pillover and innovation reource acquiition to create value with 1 Henry W. Chebrough, OPEN INNOVATION: THE NEW IMPERATIVE FOR CREATING AND PROFITING FROM TECHNOLOGY 8 (003). Ellen Enkel, Oliver Gamann & Henry Chebrough, Open R&D and Open Innovation: Exploring the Phenomenon, 39 R&D MANAGEMENT 311, (009). 3 Henry Chebrough & Adrienne Kardon Crowther, Beyond High-tech: Early Adopter of Open Innovation in Other Indutrie, 36 R&D MANAGEMENT 9 (006). 1

3 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. complementary collaborator in way of cooperation, alliance, etc. Many cholar conducted tudy of open innovation in three apect including indutry ource, organizational form and innovation performance. The tudy of open innovation i initially mainly conducted related to information technology indutry, epecially open ource and open tandard, at preent, related tudy ha broken the limit of high-technology indutry and developed to multi-indutry. On thi bai, Rigby and Zook propoed to judge whether the enterprie and it indutry are uitable for adopting the open innovation model from five indexe including innovation denity, capital ource, correlation, generality and market fluctuation. 4 Saguy think collaboration and cooperation innovation ecoytem takeholder i crucial. 5 The organizational form of open innovation can be ummarized into five type: Cooperate with lead uer and upplier; purchae patent and ownerhip of technology; invetment to participate in project of reearch intitute; et up reearch alliance; et up joint venture. The tudy conducted by Chritenen howed that the election of organizational form adopted by open innovation depend on three condition, i.e. poition of organization in innovation ytem, maturity tage of technology regime and value propoition purued by enterprie. 6 Hippel, Hertel, Wet and Hemnann conducted tudy of open innovation trategy team of enterprie; 7 Simard and Wet held that weak tie i the more organic organizational form for open innovation after ditinguihing different way of contact; 8 Gamann conducted tudy of principle that hould be followed by organizational form of open innovation; 9 Hienerth conducted analyi of caue for ucceful adoption of organizational form of open innovation by only few enterprie at preent. 10 In repect of open innovation performance, many ytematic empirical tudie pointed out that rational allocation of reource by open innovation can 4 Darrell Rigby & Chri Zook, Open-Market Innovation, 10 HARVARD BUSINESS REVIEW 80, 80 (006). 5 I. Sam Saguy, Challenge and opportunitie in food engineering: Modeling, virtualization, open innovation and ocial reponibility, 176 JOURNAL OF FOOD ENGINEERING, -8 (016). 6 Jen Frølev Chritenen, Michael Holm Oleen & Jona Sorth Kjær, The Indutrial Dynamic of Open Innovation Evidence from the Tranformation of Conumer Electronic, 34 RESEARCH POLICY 1533, 1533 (005). 7 Georg von Krogh & Eric von Hippel, Special Iue on Open Source Software Development, 3 RESEARCH POLICY 1149, 1149 (003). 8 Caroline Simard & Joel Wet, KNOWLEDGE NETWORKS AND THE GEOGRAPHIC LOCUS OF INNOVATION 0-40 (008). 9 Oliver Gamann, Opening up the Innovation Proce: toward an Agenda, 36 R&D MANAGEMENT 3, 3-6 (006). 10 Chritoph Hienerth, The Commercialization of Uer Innovation: The Development of the Rodeo Kayak Indutry, 36 R&D MANAGEMENT 73, (006). 13

4 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. improve enterprie' innovation performance. Lauren and Salter tudied the influence of openne on innovation performance from two meaurement indexe of breadth and depth, holding that there i an inverted U hape curvilinear relationhip between them. 11 Cooke explored the new model between relationhip between open innovation and regional intellectual capacity and cluter. 1 Alo ome cholar hold different view, Ajay, the reult alo how that "open innovation" might prevent intellectual property acro organizational boundarie, have a negative impact. Gambardella. 13 Alfono tudy in an open innovation relation ha an important aet will enjoy bargaining power, and on the other ide of the hinder the invetment cooperation. 14 A the reearch on open innovation move along, doubt on utainability of open innovation appear. Grantrand found that intellectual property allocation problem in the open innovation i more and more prominent. 15 Hagedoorn found that in a highly open environment, enterprie by intellectual property right protection to enure that their own innovation ability. 16 Joel Wet raied quetion on open innovation of enterprie of open-ource oftware: Why companie are till willing to contribute their own intellectual property right and reource for innovation, though they know uch innovation i advantageou to other even competitor? How to encourage external innovator to maintain continuou innovation? 17 Rene further dicued the different type of R&D cooperation value to ue and value creation for the influence of the ownerhip of intellectual property right. 18 Reinhard P and Martin Schreier 11 Keld Lauren & Ammon Salter, Open for Innovation: The Role of Openne in Explaining Innovation Performance among UK Manufacturing Firm, 7 STRATEGIC MANAGEMENT JOURNAL 131, (006). 1 Phil Cooke, Regionally Aymmetric Knowledge Capabilitie and Open Innovation: Exploring Globaliation -A new Model of Indutry Organization, 34 RESEARCH POLICY 118, 118 (005). 13 Ajay Bhakarabhatla & Deepak Hegde, An Organizational Perpective on Patenting and Open Innovation. Bhakarabhatla, 5 ORGANIZATION SCIENCE 1744, (014). 14 Alfono Gambardella & Panico Claudio, On the management of open innovation, 43 RESEARCH POLICY 903, (014). 15 Ove Grantrand & Marcu Holgeron, The Challenge of Cloing Open Innovation The Intellectual Property Diaembly Problem, 57 RESEARCH-TECHNOLOGY MANAGEMENT 19, 19-5 (014). 16 Hagedoorn John & Zobel Ann-Kritin, The Future Of Three-Dimenional Printing: Intellectual Property Or Intellectual Confinement?, 7 TECHNOLOGY ANALYSIS & STRATEGIC MANAGEMENT 1050, (015). 17 Joel Wet & Scott Gallagher, Challenge of Open Innovation: The Paradox of Firm Invetment In Open-Source Software, 36 R&D MANAGEMENT 319, (006). 18 Rene Belderboa et al., Co-Ownerhip of Intellectual Property: Exploring The Value-Appropriation And Value-Creation Implication of Co-Patenting With Different Partner, 14

5 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. tudied how to make ue of toolkit to encourage more uer to participate in the innovation continuouly. 19 Therefore, to etablih effective cooperation mechanim between open innovation participant i crucial, reearch and development cot allocation and cooperation profit ditribution are the mot key and the mot prominent and contradictory problem in cooperation mechanim, how to deign reaonable reearch and development cot allocation and cooperation profit ditribution cheme become the key to ucce of open innovation model. S. Siegel Donald pointed out that unreaonable deign of profit ditribution ytem i one of primary obtacle influencing technology tranfer between univeritie and enterprie. 0 Deborah H, conducted comparative analyi of univerity - enterprie R&D alliance of the United State, Japan and France in chemical engineering field, and found that common value rule of alliance member, ditribution of reult uch a patent and diertation are important factor to ucce of alliance. The intellectual property relationhip and it benefit mechanim in open innovation need to be determined in term of change to technology, limitation of law and ditribution of economic income. 1 Therefore, the formation, claification, definition and interet allocation mechanim of property right in the proce of analyi of technological innovation need to adopt comprehenive technical, economic and legal analyi method (TEL analyi frame). Henkel, Joachim finded giving up the intellectual property right in open innovation would help the buine development of the enterprie. It alo encourage the enterprie initiative to undertake interet allocation in the open innovation. Relatively, there are few cholar conducting tudy on cooperation mechanim among main bodie participating in open innovation, o how to deign reaonable reearch and development cot allocation and cooperation profit ditribution cheme to enure the tability of the cooperation among main bodie participating in open innovation can not only enrich the open innovation theory, but alo will be great importance for application of thi theory in practice. Taking open innovation cooperation between univerity-enterprie a 43 RESEARCH POLICY 841, (014). 19 Reinhard Prügl & Martin Schreier, Learning from Leading-Edge Cutomer at The Sim: Opening Up The Innovation Proce Uing Toolkit, 36 R&D MANAGEMENT 37, (006). 0 Donald S. Siegel et al., Commercial Knowledge Tranfer from Univeritie to Firm: Improving the Effectivene of Univerity-Indutry Collaboration, 15 JOURNAL OF HIGH TECHNOLOGY MANAGEMENT RESEARCH 111, (003). 1 Deborah H. et al., Sticky Iue for Corporate-Univerity R&D Alliance, 105 CHEMICAL ENGINEERING 39, 39-4 (1998). Joachim Henkel, Simone Schöberl & Oliver Alexy, The Emergence of Openne: How and Why Firm Adopt Selective Revealing in Open Innovation, 43 RESEARCH POLICY 879, (014). 15

6 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. an example, thi paper explore how to deign reaonable reearch and development cot allocation and cooperation profit ditribution cheme to puh utained and table open innovation cooperation. On bai of pertinent literature, Part propoe the rule of the game between univerity and enterprie in open innovation cooperation; Part 3 conduct cooperative game analyi and non-cooperative game analyi for cooperation between the two partie; Part 4 preent the reidual income ditribution model of open innovation, and conduct calculation example analyi. II. Rule of game of univerity-enterprie cooperation mechanim in open innovation A. Univerity-enterprie cooperation mechanim in open innovation From the perpective of intellectual property right tranfer, in cooperation mechanim in open innovation cooperation mode enterprie and univerity realize platform operation uch a reource integration, information haring, rik haring, intellectual property upport and fund circulation, purue the realize the cooperation mechanim enable maximization of the overall interet, produce greater competitive advantage, improve the economic benefit and ervice level of variou main bodie, thu enabling the intellectual property incubating to become the "bridge" for communicating all kind of innovation main bodie and factor market, facilitating tranfer of ytem knowledge and tranfer among variou link of longitudinal movement of intellectual property. From the perpective of cooperation mechanim, it application in open innovation facilitate the market-oriented operation mechanim and afeguard meaure of intellectual property tranfer; profit ditribution will influence the internal cot and future operating condition of variou main bodie, guide the benign development of open innovation cooperative relationhip, and tabilize the application of open innovation model in intellectual property tranfer. The determination of the cooperation mechanim not only refer to intellectual property right cooperated, but alo include product and profit produced in thi proce, a well a ditribution of interet like rik and cot produced during cooperation among enterprie repreented by direct economic value in variou main bodie, how to deal with benefit and cot allocation properly i very important. Game theory ha important application in reearch on cooperation mechanim, it i to tudy the deciion and the deciion' equilibrium when deciion-maker' action act on each other. It hold that economy i a whole, interperonal choice interact with each other, periting in the principle of fairne and rationality i the reult of gaming among cooperating partie, game 16

7 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. i mainly divided into cooperation game and non-cooperation game. Where, cooperative game i the bet way to olve cooperation bodie' benefit ditribution, which can take into conideration of both individual rationality and overall rationality, expect every mediator i able to communicate and collaborate with each other to allow the overall interet being greater than um of income produced from eparate operation of internal enterprie, meanwhile, realize repective benefit maximization and maintaining table relationhip of cooperating partie; non-cooperative game emphaize the individual rationality, which need to eek to keep benefit equilibrium of cooperating partie to realize the optimal cooperation mechanim of member in intellectual property incubating. From the perpective of game theory, the operation proce of intellectual property incubating model can be decompoed into two tep: the firt tep i to determine a profit ditribution cheme (coefficient) a deemed reaonable by two partie, which i a cooperative game proce; the econd tep i that two partie determine their contribution level to virtual enterprie under defined profit ditribution coefficient, repectively to maximize their own net income, which i a non-cooperative game proce. B. Rule of game of univerity-enterprie cooperation in open innovation The rule of game of open innovation refer to participant, action of participant and reult of uch action in cooperative game. Thi paper tudie the univerity-enterprie cooperation, participant in open innovation refer to enterprie a demander of intellectual property right innovation and univerity a provider of intellectual property right innovation. So thi paper conider the enterprie (hereinafter collectively referred to a "demander of intellectual property right") a demander of intellectual property right innovation a one party, and univerity (hereinafter collectively referred to a provider of intellectual property right") a provider of intellectual property right innovation a the other party. The action of demander of intellectual property right innovation and provider of intellectual property right innovation refer to two partie' deciion variable in a certain time point of game, generally, ai repreent the pecific action of i participant, Ai ai repreent the collection of all action for i to elect. In game theory, the action of both game participant may be dicrete or continuou. In the election of open innovation model in thi paper, the action of game participant are dicrete, while the action of profit ditribution are continuou. The trategie in game refer to rule of action of game participant with given information et, which require game participant to elect different action 17

8 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. in different ituation. i repreent the pecific trategy of participant i, the collection of all trategie of participant i i called et of trategy, recorded a S, in. Every game participant can elect one trategy, and the vector i i,,,... compoed of all trategie i called a et of trategy, where 1 n i repreent the trategy elected by participant i. In open innovation model, the cooperative partie have their repective trategy in cooperation, and alway wih to realize the maximum of their own profit under their repective trategy that they elect. If the trategy pace of demander of intellectual property and provider of intellectual property are S a, Sb, repectively, then, all trategy pace of open innovation can be repreented a,it can be found that 18 S Si i ab, with the increae of their repective trategy of demander of intellectual property and provider of intellectual property, the trategy pace of the whole cooperative intellectual property right innovation will have greater increae. If the demander of intellectual property and provider of intellectual property conider from the perpective of maximization of the overall interet of alliance, then, both partie will negotiate jointly to adopt a certain trategy to improve the overall interet of alliance intead of conidering trategy that can maximize their individual interet. III. Game analyi of univerity-enterprie cooperation mechanim in open innovation A. Aumption of the tudy Now the univerity-enterprie cooperation mechanim in open innovation i analyzed from the perpective of the framework of tatic game. During reearch and development and creation of intellectual property, the provider of intellectual property need to bear more reearch and development failure rik of intellectual property. So the undertaking of reearch and development failure rik by the provider of intellectual property mut be conidered in cooperation mechanim model. Beide, the innovation ability of the provider of intellectual property i very important to rapid market repond of the demander of intellectual property. When the demander of intellectual property i very dependent on innovative demand of intellectual property, the enterprie a demander of intellectual property right may provide a certain percentage of intellectual property right innovation cot for the provider of intellectual property to promote the development of intellectual property, improve the quality of intellectual property innovation, and horten the

9 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. development period of intellectual property by the provider of intellectual property. So thi paper introduce the intellectual property right innovation cot allocation ratio of the demander of intellectual property o a to timulate the enthuiam of the provider of intellectual property for intellectual property innovation. Suppoe the demander of intellectual property manufacture product to meet market demand D, and the unit cot of product i c m. If the provider of intellectual property reduce r m ( r c m m ) the internal production cot of unit product of the demander of intellectual property by mean of intellectual 1 property innovation, the intellectual property innovation cot i I, where I i the contant that can be etimated, i the coefficient of effort level of the provider of intellectual property in intellectual property innovation. Huge invetment i required to input one new intellectual property into actual production, o the provider of intellectual property may lack timulation for intellectual property innovation due to huge cot of invetment. So the demander of intellectual property need to adopt price ubidy and tranferring payment ytem to timulate the provider of intellectual property to carry out intellectual property innovation. Baic aumption of the model are a follow: 1. In cooperation of the demander of intellectual property and provider of intellectual property, the demander of intellectual property i one party, while the provider of intellectual property i the other party.. Market tructure i perfectly competitive market, market demand D i the production capacity of enterprie a the demander of intellectual property, here, aume D remain contant. 3. Price p of unit product i determined by overall market upply and demand, here, aume p remain contant. 4.The invetment cot for the provider of intellectual property to carry out 1 I intellectual property innovation i, where I i an invetment cot contant of the provider of intellectual property that can be etimated, i the coefficient of effort level of the provider of intellectual property in intellectual property innovation. 5. The price ubidy of unit product for the provider of intellectual property by the demander of intellectual property i r, r i price ubidy factor. 6.If the intellectual property innovation work of the provider of intellectual property i completed uccefully, then the demander of intellectual property will give it a certain intellectual property innovation ubidy. Here, uppoe the 19

10 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. intellectual property innovation ubidy factor paid to the provider of intellectual property by the demander of intellectual property i t. 7. If the provider of intellectual property reduce the internal production cot of unit product of the demander of intellectual property by mean of intellectual property innovation r m. The higher the effort level of the provider of intellectual property in intellectual property innovation, the more amount of reduction of unit cot of product of the demander of intellectual property. A, B and C repreent the net income of the demander of intellectual property, net income of the provider of intellectual property and total net income of cooperation innovation. Baed on the above aumption, one group of expreion can be obtained a follow: Net income of the demander of intellectual property: 1 A Dpcm rm rt I (1) Net income of the provider of intellectual property: 1 B Dr 1 t I () Total net income of cooperation innovation: 1 C AB Dpcm rm I (3) B. Equilibrium analyi under non-cooperation game When the demander and the provider of intellectual property are conducted non-cooperative game, the relevant deciion behavior of each party conform to the principle of economic rationality, that i to ay, each party of the indutry-univerity-reearch cooperation are all "the exterior and economic men", they alway adopt the mot favorable trategie to themelve, i.e. the priority of individual rationality. Here uppoe the demander of the intellectual property a the initiator of the open innovation of intellectual property, and the provider of intellectual property a the reponder of the cooperation. Sequential non-cooperative game model can be etablihed according to thi aumption. The demander of the intellectual property promie to provide the cot of intellectual property innovation to the provider of intellectual property, the proportion of tranfer payment i t, and confirm that the ubidy factor of price i r. After the obervation of t, the provider of intellectual property can rechooe. The olution to thi non-cooperative game i named the Stackelberg equilibrium. Then backward induction i ued, firtly find the reaction function of the 0

11 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. econd tage of thi game. The provider of intellectual property chooe the effort level of intellectual property innovation, then ue formula () to take firt derivative with repect to and make it 0, it can get a follow: db Dr 1 t I 0 d Then it can be obtained: Dr (4) 1 ti d Dr 0 dt Due to 1 ti, which prove that the effort level of innovation effort innovation developed by the provider of intellectual property how poitive correlation with the proportion of tranfer payment t provided by the demander of intellectual property, the bigger t i, the more invetment in intellectual property innovation by the provider of intellectual property i. Hence, to timulate invetment in intellectual property innovation, the demander of the intellectual property can promie higher proportion of tranfer payment for the provider of intellectual property through contract form and thu further lower the production cot of unit product of the demander of the intellectual property. Then the revenue of the demander of the intellectual property can be obtained, plug formula (4) into formula (1), get: 1 A Dpcm rm rt I (5) D rm rr Drt Dpcm 1 t I I 1 t To maximum the income of the demander of intellectual property, take firt derivative with repect to t in formula (5) and make it 0, i.e. da D rmr r D r 1t 0 3 dt 1t I I1t Then the optimum ubidy coefficient of intellectual property innovation of the demander of intellectual property can be get: rm 3r 3 t rm r (6) rm r Plug formula (6) into formula (4), can get: Drm r (7) I 1

12 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. Thu, when the demander and the provider of intellectual property are conducted non-cooperative game, the reult of Stackelberg equilibrium i: r m 3r D rm r t,, rm r I Thereby, when the demander and the provider of intellectual property are conducted non-cooperative game, the revenue of the provider and the demander of intellectual property and the total revenue of open innovation A B C are: 1 A Dp cm rm r t I (8) D r D 4r m r rm r m r Dp cm I 8I 1 D r rm r D r rm r B Dr 1t I (9) I 8I 1 C A B Dpcm rm I (10) D rmrm r D rm r Dpcm I 8I C. Equilibrium analyi under cooperative game Equilibrium analyi under cooperative game refer to the demander and the provider of intellectual property purue overall benefit maximization of both ide a a goal to confirm t and under the condition of collaboration, the cooperative game model i etablihed a follow: 1 max C A B Dpcm rm I (11) t, To maximum the whole profit of both ide, it can take firt-order partial derivative with repect to thi model, and make it 0, i.e. C Dr m I 0 It can be obtained: Drm (1) I When the demander and the provider of intellectual property are conducted Dr m t, cooperative game, the Pareto optimal olution i I, in thi cae, the income of the demander of intellectual property and the univerity reearch

13 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. party and the total income A B C of both ide are: 1 A Dp cm rm r t I D rm rrm td rm Dp cm I I (13) 1 Drr 1 t D r m m B Dr 1 t I I I (14) C D pc r 1 Drm I D pc (15) m m m I When the demander and the provider of intellectual property are conducted collaboration, Pareto optimal i not alway feaible, neither of the demander and the provider of intellectual property will accept lower income than under the condition of non-cooperative game. Thereby, when the demander and the provider of intellectual property are conducted collaboration, the cheme of effective Pareto optimal hall meet that the net income of each ide hall be equal or greater than in non-cooperative game, namely mut meet: Thu,,,,, 3 1 D t rm rmr r N t t A t A B t B I D r r 1t r 1 r A A A 0 (16) m m BB B 0 (17) I From formula (16) and (17) we can get: r 1 r r 3r 1 t 1 rm rm rm 4rm Thu, when the demander and the provider of intellectual property are conducted cooperative game, the equilibrium olution to cooperative game i a follow: Nt, t, 1 t 1, rm rm rm 4rm I r 1 r r 3 r Drm Under given condition, it i obviou that N t, i not null, o when the demander and provider of intellectual property are conducted collaboration, 4 3

14 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. effective pareto optimal i alway exiting. On thi occaion, the demander and provider of intellectual property can get more net income than the condition of on-cooperative game, thu can get the reidual income of cooperation alliance upon the effective Pareto optimal: Dr CC C (18) 8I Concluion can be reached through the above reearch, when the demander and provider of intellectual property are conducted cooperative game, the cale of intellectual property innovation i greater than non-cooperative game, becaue when both ide are conducted collaboration, the net income of both ide and the total revenue of cooperation i obviouly greater than the reult of non-cooperative game. When the demander and provider of intellectual property are conducted collaboration, the ytem alway exit effective Pareto optimal. So the demander and provider of intellectual property generally prefer to collaboration intead of non-collaborative way. Since cooperation alliance reidual income i produced during the cooperation of the demander and provider of intellectual property, then the reearch into how to ditribute the reidual income between the demander and provider of intellectual property ha very important practical ignificance. When the demander and the provider of intellectual property are conducted cooperation a rational individual, they all want to get more reidual income. Thu, the demander of intellectual property expect maller ubidy coefficient of intellectual property innovation, but the provider of intellectual property innovation expect bigger ubidy coefficient. To confirm reaonable proportion of tranfer payment, the bargain model of Rubintein i ued for computing. The bargain model of Rubintein certifie the unique exitence of the reult 1 of ubgame perfect equilibrium in infinite alternating-offer game: r. 1 1 Of which, 1 repreent the dicount factor (negotiation ability) of the provider and the demander of intellectual property repectively. In other word, in given ituation, the cooperating party with higher negotiation ability can get bigger hare. The negotiation ability depend on the market poition and negotiation cot of the demander and the provider of intellectual property. When, 1 i known, the ytem reidual income obtained by the demander and the provider of intellectual property i a follow: 1 D r Ar C 81 I 1 4

15 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. 11 D r B 1r C 81 1 I The ubidy coefficient of intellectual property innovation of effective Pareto optimal i: A B r 1 1 r 1 r t tmax t min 1 Z Z rm rm 41 1 rm Wherein: r 3 r r 1 r 1 D rm tmax 1, tmin 1, Z I rm 4rm rm rm I When the cooperative game i conducted between the demander and the provider of intellectual property, the equilibrium olution of cooperative game i: r 1 1 r 1 r Dr m t, 1, rm rm rm I Suppoe that the negotiation ability 1 of the demander of intellectual property remain unchanged, but the negotiation ability of the provider of intellectual property increae to ( ), then the ubidy coefficient of intellectual property innovation of effective Pareto optimal i t, which can be achieved through computing: t t r r = 0 rm r m Thu t t, i.e. when the negotiating ability of the provider of intellectual property increae, the ubidy coefficient of intellectual property innovation of effective Pareto optimality increae, then the provider of the intellectual property can get more reidual income. Similarly, uppoe that the negotiation ability of the provider of intellectual property remain unchanged, but the negotiation ability of the demander increae to 1 ( 1 1 ) then: t t r r = 0 rm r m Thu t t 5, i.e. when the negotiating ability of the demander of

16 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. intellectual property increae, the ubidy coefficient of intellectual property innovation of effective Pareto optimality decreae, then the demander of the intellectual property can get more reidual income. Thu, concluion can be reached, the ditribution of the reidual income mainly depend on the negotiation ability of the provider and demander of the intellectual property, the higher the negotiation ability, the more the reidual income. IV. The application of cooperative game equilibrium olution in the deign of open and cooperative cooperation mechanim A. Etimation of model parameter 1.The etimation of innovation cot I of intellectual property A the univeritie and cientific reearch intitution of the provider of intellectual property innovation, material reource, information reource with certain value and human reource with high intelligence are needed in the development proce of intellectual property. Thu, the innovation cot of intellectual property i divided in two part here: i.e. the input cot of material and information reource and the input cot of human reource. Of which, the input cot of material and information reource can be deemed a two part, one i fixed cot, the other one i time variable cot, which mean that it i concerned with the development time of intellectual property innovation. While the input cot of human reource can be deemed a relating to the length of development time of intellectual property innovation. Here, conider the fixed cot of material and information of the provider of intellectual property innovation in the development proce of the intellectual property i C k, and the variable cot per unit in innovation with regard to the length of development time i AVC, the variable cot per unit in innovation can be etimated by the following formula: AVC AVC AC Of which AVC i innovative variable cot per unit, AVCI i variable cot of material information reource per unit, ACH i human reource cot per unit. AVCI include information deign cot per unit and the cot of deigning and eeking effective information, intellectual property cot per unit and the cot of collecting and proceing and the cot of information reource and human reource per unit. ACH include the cot achieved per unit: recruiting cot, election cot, I H 6

17 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. hiring and placement cot. Development cot per unit i orientation cot and training cot, uage cot per unit i reward paid by enterprie but not including bonu. After the confirmation of innovative variable cot per unit, uppoe T a total time devoted by univeritie or cientific reearch intitution of the provider of intellectual property in intellectual property innovation, C k a fixed cot of material and information reource innovation, thu the etimation formula of innovation cot I of intellectual property can be conformed a follow: I Ck AVC T Ck AVCI ACH T. Confirmation of, 1 the coefficient of negotiation ability When cooperation i conducted between the demander and the provider of intellectual property, to get more reidual income, the demander of intellectual property expect maller ubidy coefficient in intellectual property innovation, but the provider of intellectual property expect bigger ubidy coefficient in intellectual property innovation. In a given ituation, the one with tronger negotiation ability get the bigger hare of the reidual income, o the confirmation of the negotiation ability eem to be of vital importance. In thi paper, fuzzy comprehenive evaluation method i ued to confirm the coefficient of negotiating ability of both ide, the negotiation ability depend on factor of the demander and the provider of intellectual property uch a the degree of rik appetite, market poition, negotiation cot, operational and financial tatu, etc. According to what i mentioned above, the evaluation factor et i: A The degree of rik appetite, M arket poition, N egotiation cot, F inancial tatu Firtly, the analytic hierarchy proce can be ued to determine the weight of each evaluation index in A integrated with the judgment of the expert for the relative importance of each evaluation factor, the quoting of cale criterion of 1-9 ha repectively etablihed factor level of evaluation for the judgment matrix of overall evaluation level and the correponding evaluation factor of each index in index level of evaluation. Suppoe that the correponding weight W w1, w, w3, w4 vector et and the evaluation et of each factor V Low, relatively low, ordinary, relatively high, high, the value are V given to each factor in the evaluation et i V 0.1,0.3,0.5,0.7,0.9. To get the degree of memberhip of each index with repect to the coefficient of negotiation ability between the provider and the demander of intellectual property, 10 expert are invited to core four indexe repectively in 7

18 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. the coefficient of negotiating ability of the provider and the demander of intellectual property. The evaluation et of each factor in the coefficient of negotiation ability i etablihed and the evaluation reult of all expert are counted, then ingle factor can be aeed and fuzzy relation ynthetical matrix can be etablihed, i.e. enure the degree of memberhip of evaluation target for fuzzy ubet from ingle factor and then get fuzzy relation matrix. The four fuzzy vector in fuzzy relation matrix that affect the negotiation ability are Arik appetite, Amarket poition, Anegotiation cot, A financial ituation. Then fuzzy relation matrix i: WThe degree of rik appetite r11 r1 r13 r14 r15 W Market poition r1 r r3 r4 r 5 R W r Negotiation cot 31 r3 r33 r34 r 35 W r Financial tatu 41 r4 r43 r44 r45 Later computing evaluation vector: r11 r1 r13 r14 r15 r1 r r3 r4 r 5 C W R w1, w, w3, w4 c1, c, c3, c4, c5 r31 r3 r33 r34 r 35 r41 r4 r43 r44 r45 Thu obtaining the coefficient of negotiating ability: T CV c1, c, c3, c4, c c10.3c 0.5c30.7c40.9c Now the olution to negotiation ability coefficient will be tudied, a tated before, the evaluation factor of model i A The degree of rik appetite, M arket poition, N egotiation cot, Financial tatu. Firtly, the analytic hierarchy proce (AHP) will be ued to enure the weight of each evaluation index in A. The importance cale of pairwie comparion on four indexe obtain according to the expert quetionnaire of feedback, which can compute the weight of four indexe uch a the degree of rik appetite, market poition, negotiation cot and the operational and financial tatu: W w1, w, w3, w4 [0.5174,0.3038, , 0.061] Secondly, according to the degree of memberhip of evaluation index in 8

19 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. negotiation ability coefficient of the demander and the provider of intellectual property, their fuzzy evaluation matrix can be obtained: R , R The weight of four item in negotiation ability coefficient and fuzzy evaluation matrix of the demander and the provider of intellectual property are obtained, then we can compute evaluation vector C i, Ci W Ri Thu the negotiation ability coefficient of the demander and the provider of intellectual property i: Hence, the reult of ubgame perfect equilibrium can be further obtained: B. Digital imulation example The etimating and olving of parameter i tudied previouly, now we tudy the revenue between the demander and the provider of intellectual property under the condition of non-cooperative game and cooperative game in the innovation of open innovation of intellectual property through digital imulation. Set p 0, c 5, r 4, r, D100, c 3, T 100, AVC 10, m m k I AC 0, 0.471, H 1 From the above parameter, we can get that the cot of innovation in intellectual property i: I Ck AVCI ACH T When the demander and the provider of intellectual property carry through non-cooperative game, the Stackelberg equilibrium i: r m 3r D rm r t,, rm r I , 0.333, Now, the revenue of the provider and the demander of intellectual property and the total revenue A, B, C i: 9

20 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. A D p cm D 4rm r D rm r rm r I 8I Drrmr Drrmr B I 8I C A1 B When the demander and the provider of intellectual property carry through cooperative game, the equilibrium olution of cooperative game i: r 1 1 r 1 r Dr m t, 1, r r 41 r I m m 1 m , 0.644, Now, the revenue of the provider and the demander of intellectual property A and the total revenue, B, C i: D r m rr m tdrm A Dpcm I I Drr 1t D rm m B I I Drm C Dpcm I

21 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. Table 1 Reult Comparing between Non-cooperative Game and Cooperative Game Non-cooper ative game Cooperativ e game Equilibrium olution (0.333, ) (0.644, 0.133) The revenue of the demander of intellectual property The revenue of the provider of intellectual property Total revenue Though Table 1, we can ee the reult received between non-cooperative game and cooperative game, the Stackelberg equilibrium of non-cooperative t, game i 0.333, , the equilibrium olution of cooperative game t, 0.644, i, o uch concluion can be obtained, the level of effort in the innovation of intellectual property by the provider enhance a the ubidy coefficient in innovation reearch of intellectual property increae by the demander, which conform to the foregoing tatement. In both cae, the enterprie party obtain revenue A A, the reearch party obtain revenue B B the total revenue i obtained C C, i.e. the obtained revenue of the demander and the provider of intellectual property and the total revenue increae in cooperative game compared with non-cooperative game, which mean that more revenue will be created upon collaboration againt noncooperation, thu bringing in more revenue for both partie repectively. V. Concluion Open innovation i one of the effective mode to promote the tranfer of univeritie reearch reult of intellectual property into the enterprie demander of intellectual property. To well olve the problem of cot allocation and benefit ditribution between the demander and the provider of the intellectual property i the key to keep long-term and table development of open innovation of intellectual property, the reearch for cooperative mechanim between univeritie and enterprie in open innovation i baed on game theory and ue mixed mode of profit ditribution a analyi thought. Through the analyze of 31

22 [016] Vol.5 NTUT J. of Intell. Prop. L. & Mgmt. non-cooperative game and cooperative game between the demander and the provider we have dicovered that, 1) the commitment of high proportion of tranfer payment made by the provider to the demander of intellectual property through contract form can better timulate the provider to increae invetment in intellectual property innovation thu improving the overall return of open innovation. ) The provider and the demander of the intellectual property hall prefer collaborative innovation to the way of non-cooperative game, becaue the cale of intellectual property innovation of non-cooperation i alway le than cooperative game. 3) The exce earning brought by cooperative innovation can be rationally ditributed according to the reult of ubgame perfect equilibrium of Rubintein. The ditribution outcome of exce earning depend on the negotiation ability of the provider and the demander for intellectual property. The reearch of thi paper ha provided effective thought for the etablihment of open innovation of cooperative mechanim, the final example alo certifie the effectivene and reaonability of thi analytical method. 3