Patent Pools and Product Development
AbstractThe conventional wisdom is that the formation of patent pools is welfare enhancing when patents are complementary, since the pool avoids a double-marginalization problem associated with independent licensing. The focus of this paper is on (downstream) product development and commercialization on the basis of perfectly complementary patents. We consider development technologies that entail spillovers between rivals, and assume that nal demand products are imperfect substitutes. If pool formation either increases spillovers in development or decreases the degree of product di erentiation, pool formation can actually adversely a ect overall welfare by reducing incentives towards product development and product market competition|even with perfectly complementary patents. This significantly modifies and possibly even negates the conventional wisdom for many settings. The paper provides insights into why patent pools are uncommon in science-based industries such as biotech, despite there being strong policy advocacy for them.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Towson University, Department of Economics in its series Working Papers with number 2011-02.
Length: 37 pages
Date of creation: Feb 2011
Date of revision: Feb 2011
Patent Pools; Research and Development; Innovation; BioTechnology; Electronics.;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- L4 - Industrial Organization - - Antitrust Issues and Policies
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- D2 - Microeconomics - - Production and Organizations
- D4 - Microeconomics - - Market Structure and Pricing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-12 (All new papers)
- NEP-COM-2011-03-12 (Industrial Competition)
- NEP-IND-2011-03-12 (Industrial Organization)
- NEP-INO-2011-03-12 (Innovation)
- NEP-IPR-2011-03-12 (Intellectual Property Rights)
- NEP-TID-2011-03-12 (Technology & Industrial Dynamics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nisvan Erkal & Deborah Minehart, 2007.
"Optimal Sharing Strategies in Dynamic Games of Research and Development,"
EAG Discussions Papers
200707, Department of Justice, Antitrust Division.
- Nisvan Erkal & Deborah Minehart, 2008. "Optimal Sharing Strategies in Dynamic Games of Research and Development," EAG Discussions Papers 200806, Department of Justice, Antitrust Division.
- Nisvan Erkal & Deborah Minehart, 2008. "Optimal Sharing Strategies in Dynamic Games of Research and Development," Department of Economics - Working Papers Series 1038, The University of Melbourne.
- Jay Pil Choi, 2010.
"Patent Pools And Cross-Licensing In The Shadow Of Patent Litigation,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(2), pages 441-460, 05.
- Jay Pil Choi, 2009. "Patent Pools and Cross-Licensing in the Shadow of Patent Litigation," Global COE Hi-Stat Discussion Paper Series gd08-044, Institute of Economic Research, Hitotsubashi University.
- Choi, Jay Pil, 2009. "Patent Pools and Cross-Licensing in the Shadow of Patent Litigation," PIE/CIS Discussion Paper 417, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
- Lin, Ping & Saggi, Kamal, 2002. "Product differentiation, process R&D, and the nature of market competition," European Economic Review, Elsevier, vol. 46(1), pages 201-211, January.
- Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
- M. Bourreau & P. Dogan, .
"Cooperation in Product Development and Process R&D Between Competitors,"
33645, Harvard University OpenScholar.
- Bourreau, Marc & Dogan, PInar, 2010. "Cooperation in product development and process R&D between competitors," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 176-190, March.
- Bourreau, Marc & Dogan, Pinar, 2010. "Cooperation in Product Development and Process R&D Between Competitors," Scholarly Articles 4863170, Harvard Kennedy School of Government.
- Bourreau, Marc & Dogan, Pinar, 2007. "Cooperation in Product Development and Process R&D Between Competitors," Working Paper Series rwp07-056, Harvard University, John F. Kennedy School of Government.
- Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-306, December.
- Sung-Hwan Kim, 2004. "Vertical Structure and Patent Pools," Review of Industrial Organization, Springer, vol. 25(3), pages 231-250, 07.
- María José Gil Moltó & Nikolaos Georgantzís & Vicente Orts, 2005.
"Cooperative R&D with Endogenous Technology Differentiation,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 14(2), pages 461-476, 06.
- María José Gil Moltó & Nikolaos Georgantzís & Vicente Orts, 2004. "Cooperative R&D with Endogenous Technology Differentiation," Industrial Organization 0401009, EconWPA.
- Russ Pittman, 2007.
"Consumer Surplus as the Appropriate Standard for Antitrust Enforcement,"
Competition Policy International, vol. 3.
- Russell Pittman, 2007. "Consumer Surplus as the Appropriate Standard for Antitrust Enforcement," EAG Discussions Papers 200709, Department of Justice, Antitrust Division.
- Choi, Jay Pil, 1993. "Cooperative R&D with product market competition," International Journal of Industrial Organization, Elsevier, vol. 11(4), pages 553-571.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Juergen Jung).
If references are entirely missing, you can add them using this form.