Efficient Patent Pools
AbstractThe paper builds a tractable model of a patent pool, an agreement among patent owners to license a set of their patents to one another or to third parties. It first provides a necessary and suÃ±cient condition for a patent pool to enhance welfare. It shows that requiring pool members to be able to independently license patents matters if and only if the pool is otherwise welfare reducing, a property that allows the antitrust authorities to use this requirement to screen out unattractive pools. The paper then undertakes a number of extensions. It evaluates the external test' according to which patents with substitutes should not be included in a pool; analyzes the welfare implications of the reduction in the members' incentives to invent around or challenge the validity of each other's patents; looks at the rationale for the (common) provision of automatic assignment of future related patents to the pool; and, last, studies the intellectual property owners' incentives to form a pool or to cross-license when they themselves are users of the patents in the pool.
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Bibliographic InfoPaper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 211.
Date of creation: 2003
Date of revision:
Publication status: Published in American Economic Review, vol.�94, n°3, juin 2004, p.�691-711.
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Other versions of this item:
- K11 - Law and Economics - - Basic Areas of Law - - - Property Law
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
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- Josh Lerner & Marcin Strojwas & Jean Tirole, 2007.
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- Hausman, Jerry A & Leonard, Gregory K & Tirole, Jean, 2003.
" On Nonexclusive Membership in Competing Joint Ventures,"
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"Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting,"
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- Carl Shapiro, 2004. "Navigating the Patent Thicket: Cross Licenses, Patent Pools and Standard Setting," Levine's Working Paper Archive 122247000000000539, David K. Levine.
- Carl Shapiro, 2003. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting," Law and Economics 0303005, EconWPA.
- Brueckner, Jan K & Whalen, W Tom, 2000. "The Price Effects of International Airline Alliances," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 503-45, October.
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