IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/9175.html
   My bibliography  Save this paper

Efficient Patent Pools

Author

Listed:
  • Josh Lerner
  • Jean Tirole

Abstract

The 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 suñcient 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.

Suggested Citation

  • Josh Lerner & Jean Tirole, 2002. "Efficient Patent Pools," NBER Working Papers 9175, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9175
    Note: CF PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w9175.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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 503-545, October.
    2. Vincenzo Denicolo, 2002. "Sequential innovation and the patent-antitrust conflict," Oxford Economic Papers, Oxford University Press, vol. 54(4), pages 649-668, October.
    3. Whinston, Michael D, 1990. "Tying, Foreclosure, and Exclusion," American Economic Review, American Economic Association, vol. 80(4), pages 837-859, September.
    4. Carl Shapiro, 2001. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," NBER Chapters, in: Innovation Policy and the Economy, Volume 1, pages 119-150, National Bureau of Economic Research, Inc.
    5. Rasmusen, Eric, 1988. "Entry for Buyout," Journal of Industrial Economics, Wiley Blackwell, vol. 36(3), pages 281-299, March.
    6. Hausman, Jerry A & Leonard, Gregory K & Tirole, Jean, 2003. "On Nonexclusive Membership in Competing Joint Ventures," RAND Journal of Economics, The RAND Corporation, vol. 34(1), pages 43-62, Spring.
    7. Josh Lerner & Jean Tirole & Marcin Strojwas, 2003. "Cooperative Marketing Agreements Between Competitors: Evidence from Patent Pools," NBER Working Papers 9680, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Layne-Farrar, Anne & Salinger, Michael A., 2016. "Bundling of RAND-committed patents," Research Policy, Elsevier, vol. 45(6), pages 1155-1164.
    2. 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.
    3. Langinier, Corinne, 2006. "Pool of Basic Patents and Follow-Up Innovations," Staff General Research Papers Archive 12647, Iowa State University, Department of Economics.
    4. Nancy Gallini, 2011. "Private agreements for coordinating patent rights: the case of patent pools," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2011(3), pages 5-30.
    5. Jay Pil Choi, 2003. "Pools and Cross-Licensing in the Shadow of Patent Litigation," CESifo Working Paper Series 1070, CESifo.
    6. Bessen James, 2009. "Evaluating the Economic Performance of Property Systems," Review of Law & Economics, De Gruyter, vol. 5(3), pages 1037-1061, December.
    7. Hussinger, Katrin & Grimpe, Christoph, 2007. "Firm Acquisitions and Technology Strategy: Corporate versus Private Equity Investors," ZEW Discussion Papers 07-066, ZEW - Leibniz Centre for European Economic Research.
    8. Dehez Pierre & Poukens Sophie, 2014. "The Shapley Value as a Guide to FRAND Licensing Agreements," Review of Law & Economics, De Gruyter, vol. 10(3), pages 265-284, November.
    9. Dennis W. Carlton, 2007. "Does Antitrust Need to be Modernized?," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 155-176, Summer.
    10. Rockett, Katharine, 2010. "Property Rights and Invention," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 315-380, Elsevier.
    11. Ricardo Flores-Fillol & Rafael Moner-Colonques, 2011. "Endogenous Mergers of Complements with Mixed Bundling," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 39(3), pages 231-251, November.
    12. Packalen, Mikko, 2010. "Complements and potential competition," International Journal of Industrial Organization, Elsevier, vol. 28(3), pages 244-253, May.
    13. Galasso, Alberto, 2007. "Broad cross-license agreements and persuasive patent litigation: theory and evidence from the semiconductor industry," LSE Research Online Documents on Economics 6718, London School of Economics and Political Science, LSE Library.
    14. Etro, Federico, 2016. "Research in economics and industrial organization," Research in Economics, Elsevier, vol. 70(4), pages 511-517.
    15. TSUKADA Naotoshi & NAGAOKA Sadao, 2011. "Standards as a Knowledge Source for R&D: A first look at their incidence and impacts based on the inventor survey and patent bibliographic data," Discussion papers 11018, Research Institute of Economy, Trade and Industry (RIETI).
    16. Erkal, Nisvan, 2005. "The decision to patent, cumulative innovation, and optimal policy," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 535-562, September.
    17. Ishihara, Akifumi & Yanagawa, Noriyuki, 2018. "Dark sides of patent pools with independent licensing," International Journal of Industrial Organization, Elsevier, vol. 57(C), pages 1-34.
    18. Hussinger, Katrin & Grimpe, Christoph, 2008. "Market and Technology Access Through Firm Acquisitions: Beyond One Size Fits All," ZEW Discussion Papers 08-037, ZEW - Leibniz Centre for European Economic Research.
    19. Grimpe, Christoph & Hussinger, Katrin, 2008. "Building and Blocking: The Two Faces of Technology Acquisition," ZEW Discussion Papers 08-042, ZEW - Leibniz Centre for European Economic Research.
    20. Rudy Santore & Michael McKee & David Bjornstad, 2010. "Patent Pools as a Solution to Efficient Licensing of Complementary Patents? Some Experimental Evidence," Journal of Law and Economics, University of Chicago Press, vol. 53(1), pages 167-183, February.

    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:9175. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.