Resort to Third Parties for the Governance of Technology Licensing Agreement : a Transaction Cost Perspective

While the literature on licensing through the Transaction Costs lens is rather extensive, the role played by third parties in the licensor-licensee relationship has received very limited attention. However, although licensing agreements are essentially dyadic exchanges, licensors and licensees frequently decide to resort to services developed by third parties in order to ease and support their licensing relationships. This support can be required at one or more contractual level(s): the identification of a licensing partner, the negotiation of the licensing contract, the monitoring of the licensing relationship, and the enforcement of the licensing contractual terms. In this paper, I propose, first, a typology of support services developed by third parties. Second, in line with the Transaction Costs arguments, I develop propositions regarding the incentives for licensing partners to resort to support services develop by third parties. I argue that this resort is contingent to the levels of asset specificity and uncertainty characterizing the licensing transaction.