IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Dark Sides of Patent Pools with Compulsory Independent Licensing

  • Akifumi Ishihara

    (Kyoto University)

  • Noriyuki Yanagawa

    (The University of Tokyo)

Registered author(s):

    This paper examines roles of patent pools with compulsory independent licensing. A seminal work by Lerner and Tirole (2004) have shown that requiring independent licensing or compulsory independent licensing is a useful tool to select only desirable patent pools. In this paper, however, we are going to show that their argument is not always true, If there are users who demand only a part of the pooled technologies, the compulsory independent licensing gives a tool for price discrimination for the patent holders, and that is welfare decreasing under some conditions. Moreover, the compulsory independent licensing may promote entry deterrence when there are lower grade entrants. Even in this sense, compulsory independent licensing decreases social welfare. The welfare under the patent pool with independent licensing may become lower than that under the competitive licensing.

    If 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.

    File URL: http://www.carf.e.u-tokyo.ac.jp/pdf/workingpaper/fseries/F318.pdf
    Download Restriction: no

    Paper provided by Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo in its series CARF F-Series with number CARF-F-318.

    as
    in new window

    Length: 42 pages
    Date of creation: May 2013
    Date of revision:
    Handle: RePEc:cfi:fseres:cf318
    Contact details of provider: Postal: Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033
    Phone: +81-3-5841-0682
    Web page: http://www.carf.e.u-tokyo.ac.jp/english/Email:


    More information through EDIRC

    References listed on IDEAS
    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.:

    as in new window
    1. Steffen Brenner, 2009. "Optimal formation rules for patent pools," Economic Theory, Springer, vol. 40(3), pages 373-388, September.
    2. Fang,H. & Norman,P., 2003. "To bundle or not to bundle," Working papers 18, Wisconsin Madison - Social Systems.
    3. Jay Pil Choi & Christodoulos Stefanadis, 2006. "Bundling, Entry Deterrence, and Specialist Innovators," The Journal of Business, University of Chicago Press, vol. 79(5), pages 2575-2594, September.
    4. Schiff, Aaron & Aoki, Reiko, 2008. "Differentiated Standards and Patent Pools," PIE/CIS Discussion Paper 360, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    5. Randal Heeb, 2003. "Randal Heeb Innovation and Vertical Integration in Complementary Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 387-417, 09.
    6. Yannis Bakos & Erik Brynjolfsson, 1997. "Bundling Information Goods: Pricing, Profits and Efficiency," Working Paper Series 199, MIT Center for Coordination Science.
    7. John Thanassoulis, 2006. "Competitive Mixed Bundling and Consumer Surplus," Economics Series Working Papers 263, University of Oxford, Department of Economics.
    8. Dennis W. Carlton & Michael Waldman, 1998. "The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries," NBER Working Papers 6831, National Bureau of Economic Research, Inc.
    9. 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.
    10. Josh Lerner & Jean Tirole, 2002. "Efficient Patent Pools," NBER Working Papers 9175, National Bureau of Economic Research, Inc.
    11. John Vickers & Mark Armstrong, 2006. "Competitive Nonlinear Pricing and Bundling," Economics Series Working Papers 281, University of Oxford, Department of Economics.
    12. McAfee, R Preston & McMillan, John & Whinston, Michael D, 1989. "Multiproduct Monopoly, Commodity Bundling, and Correlation of Values," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 371-83, May.
    13. Chen, Yongmin, 1997. "Equilibrium Product Bundling," The Journal of Business, University of Chicago Press, vol. 70(1), pages 85-103, January.
    14. Aoki, Reiko & Nagaoka, Sadao, 2007. "Formation of a Pool with Essential Patents," Discussion Paper 326, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    15. Schmalensee, Richard, 1982. "Commodity Bundling by Single-Product Monopolies," Journal of Law and Economics, University of Chicago Press, vol. 25(1), pages 67-71, April.
    16. Yannis Bakos & Erik Brynjolfsson, 2000. "Bundling and Competition on the Internet," Marketing Science, INFORMS, vol. 19(1), pages 63-82, May.
    17. Lewbel, Arthur, 1985. "Bundling of substitutes or complements," International Journal of Industrial Organization, Elsevier, vol. 3(1), pages 101-107, March.
    18. Aoki, Reiko & Nagaoka, Sadao, 2005. "Coalition Formation for a Consortium Standard Through a Standard Body and a Patent Pool: Theory and Evidence from MPEG2, DVD and 3G," IIR Working Paper 05-01, Institute of Innovation Research, Hitotsubashi University.
    19. "Aoki, Reiko" & "Nagaoka, Sadao", 2004. "The Consortium Standard and Patent Pools," Economic Review, Hitotsubashi University, vol. 55(4), pages 345-357, January.
    20. Stephen Martin, 1998. "Strategic and Welfare Implications of Bundling," CIE Discussion Papers 1998-14, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
    21. Adams, William James & Yellen, Janet L, 1976. "Commodity Bundling and the Burden of Monopoly," The Quarterly Journal of Economics, MIT Press, vol. 90(3), pages 475-98, August.
    22. Economides, Nicholas & Salop, Steven C, 1992. "Competition and Integration among Complements, and Network Market Structure," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 105-23, March.
    23. Michael D. Whinston, 1989. "Tying, Foreclosure, and Exclusion," NBER Working Papers 2995, National Bureau of Economic Research, Inc.
    24. Matutes, Carmen & Regibeau, Pierre, 1992. "Compatibility and Bundling of Complementary Goods in a Duopoly," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 37-54, March.
    25. Chen, Yongmin & Gayle, Philip G., 2007. "Vertical contracting between airlines: An equilibrium analysis of codeshare alliances," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 1046-1060, October.
    26. Adam D. Rennhoff & Konstantinos Serfes, 2009. "The Role of Upstream-Downstream Competition on Bundling Decisions: Should Regulators Force Firms to Unbundle?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(2), pages 547-588, 06.
    27. Choi, Jay Pil & Stefanadis, Christodoulos, 2001. "Tying, Investment, and the Dynamic Leverage Theory," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 52-71, Spring.
    28. Sung-Hwan Kim, 2004. "Vertical Structure and Patent Pools," Review of Industrial Organization, Springer, vol. 25(3), pages 231-250, 07.
    29. repec:rje:randje:v:37:y:2006:i:4:p:946-963 is not listed on IDEAS
    30. Peitz, Martin, 2008. "Bundling may blockade entry," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 41-58, January.
    31. Schmalensee, Richard, 1984. "Gaussian Demand and Commodity Bundling," The Journal of Business, University of Chicago Press, vol. 57(1), pages S211-30, January.
    32. R. Venkatesh & Wagner Kamakura, 2003. "Optimal Bundling and Pricing under a Monopoly: Contrasting Complements and Substitutes from Independently Valued Products," The Journal of Business, University of Chicago Press, vol. 76(2), pages 211-232, April.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:cfi:fseres:cf318. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.