The development of innovations is increasingly portrayed as a dynamic interplay between two or more actors. This started with the seminal work of von Hippel concerning the role of users during the initial stages of the development cycle. Subsequent studies by numerous academics demonstrated the relevance of continuous interaction between the manufacturer and potential users. Swedish researchers, in particular, elaborated on the concept of manufacturer-user interaction by focusing on networks consisting of a number of different parties linked together by means of interactive relationships. However, most of the work in this area tends to be of a theoretical and conceptual nature. The research presented in this paper was designed especially to remedy this situation by studying the actual functioning of individual firms within such networks. The empirical data provided by the Dutch medical equipment industry describe the distribution of innovation across manufacturers, users and various third parties. The evidence points to the relevance of interacting with both potential users and various third parties. Nevertheless, essential differences exist between the interaction with both types of cooperation partners. A detailed case description furnishes substantial insight into the intricacies and pitfalls of developing industrial innovations within complex networks.