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Private Agreements for Coordinating Patent Rights: The Case of Patent Pools

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  • Gallini, Nancy

Abstract

Inventors and users of technology often enter into cooperative agreements for sharing their intellectual property in order to implement a standard or to avoid costly infringement litigation. Over the past two decades, U.S. antitrust authorities have viewed pooling arrangements that integrate complementary, valid and essential patents to have “pro-competitive benefits†in reducing prices, transactions costs, and the incidence of costly infringement suits. Since patent pools are cooperative agreements, they also have the potential of suppressing competition if, for example, they harbor weak or invalid patents, dampen incentives to conduct research on innovations that compete with the pooled patents, foreclose competition from downstream product or upstream innovation markets, or raise prices on goods that compete with the pooled patents. In synthesizing the ideas advanced in the economic literature, this paper explores whether these antitrust concerns apply to pools with complementary patents. Special attention is given to the U.S. Department of Justice-Federal Trade Commission Guidelines for the Licensing of Intellectual Property (1995) and its application to recent patent pool cases.

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Bibliographic Info

Paper provided by Vancouver School of Economics in its series Economics working papers with number nancy_gallini-2010-34.

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Length: 28 pages
Date of creation: 17 Nov 2010
Date of revision: 17 Nov 2010
Handle: RePEc:ubc:bricol:nancy_gallini-2010-34

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Web page: http://www.economics.ubc.ca/

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Keywords: Patent pools; intellectual property; antitrust economics;

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References

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  1. Nancy Gallini & Suzanne Scotchmer, 2002. "Intellectual Property: When Is It the Best Incentive System?," Law and Economics 0201001, EconWPA.
  2. James Bessen & Michael J. Meurer, 2008. "Introduction to Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk
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  8. Josh Lerner & Jean Tirole, 2004. "Efficient Patent Pools," American Economic Review, American Economic Association, vol. 94(3), pages 691-711, June.
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  10. Ryan L. Lampe & Petra Moser, 2009. "Do Patent Pools Encourage Innovation? Evidence from the 19th-Century Sewing Machine Industry," NBER Working Papers 15061, National Bureau of Economic Research, Inc.
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  19. Mukesh Eswaran & Nancy Gallini, 1996. "Patent Policy and the Direction of Technological Change," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 722-746, Winter.
  20. Jay Pil Choi & Heiko Gerlach, 2011. "Selection Biases in Complementary R&D Projects," CESifo Working Paper Series 3425, CESifo Group Munich.
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  22. Kremer, Michael R., 1998. "Patent Buyouts: A Mechanism for Encouraging Innovation," Scholarly Articles 3693705, Harvard University Department of Economics.
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Citations

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Cited by:
  1. Dequiedt, Vianney & Versaevel, Bruno, 2013. "Patent pools and dynamic R&D incentives," International Review of Law and Economics, Elsevier, vol. 36(C), pages 59-69.
  2. Cassone, Alberto & Ramello, Giovanni B., 2011. "The Simple Economics of Class Action: Private Provision of Club and Public Goods," IEL Working Papers 3, Institute of Public Policy and Public Choice - POLIS.
  3. Ralph Siebert, 2013. "Are Ex Ante and Ex Post Licensing Agreements Useful Instruments to Lessen Uncertainty in R&D?," CESifo Working Paper Series 4535, CESifo Group Munich.
  4. Lerner, Josh & Tirole, Jean, 2013. "Standard-Essential Patents," TSE Working Papers 13-441, Toulouse School of Economics (TSE), revised 13 Mar 2014.
  5. Ryan L. Lampe & Petra Moser, 2012. "Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries under the New Deal," NBER Working Papers 18316, National Bureau of Economic Research, Inc.

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