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Patent Pools in Input Markets

Author

Listed:
  • Tarantino, Emanuele
  • Reisinger, Markus

Abstract

We show that patent pools formed by owners of perfectly complementary patents are anticompetitive if one of the licensors is integrated with a manufacturer. With vertical integration, the pool serves as coordination device, allowing patent holders to restrict supplies to the product market and share the larger profits of the affiliated manufacturer. These results are robust to entry, the contractual and competitive environments. The imposition of an unbundling and pass-through requirement makes patent pools socially desirable. We also show that this requirement is more effective than a mandated non-discriminatory policy enforcing FRAND commitments in screening anticompetitive pools.

Suggested Citation

  • Tarantino, Emanuele & Reisinger, Markus, 2016. "Patent Pools in Input Markets," CEPR Discussion Papers 11512, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:11512
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    References listed on IDEAS

    as
    1. Aleksandra Boutin, 2016. "Screening for good patent pools through price caps on individual licenses," ULB Institutional Repository 2013/236257, ULB -- Universite Libre de Bruxelles.
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    Cited by:

    1. Patrick Rey & Jean Tirole, 2019. "Price Caps as Welfare-Enhancing Coopetition," Journal of Political Economy, University of Chicago Press, vol. 127(6), pages 3018-3069.

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    More about this item

    Keywords

    Complementary patents; Patent pools and joint marketing agreements; Vertical integration and restraints; Frand; Antitrust policy;
    All these keywords.

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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