American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Pooling with Essential and Nonessential Patents
American Economic Journal: Microeconomics
vol. 6,
no. 1, February 2014
(pp. 23–57)
Abstract
Several recent technological standards were accompanied by patent pools—arrangements to license relevant intellectual property as a package. A key distinction made by regulators—between patents essential to a standard and patents with substitutes—has not been addressed in the theoretical literature. I show that pools of essential patents are always welfare increasing, while pools which include nonessential patents can be welfare reducing—even pools limited to complementary patents and stable under compulsory individual licensing. If pools gain commitment power and price as Stackelberg leaders, this reduces, and can reverse, the gains from welfare increasing pools.Citation
Quint, Daniel. 2014. "Pooling with Essential and Nonessential Patents." American Economic Journal: Microeconomics, 6 (1): 23–57. DOI: 10.1257/mic.6.1.23Additional Materials
JEL Classification
- D43 Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection
- D45 Rationing; Licensing
- K21 Antitrust Law
- L13 Oligopoly and Other Imperfect Markets
- L24 Contracting Out; Joint Ventures; Technology Licensing
- O34 Intellectual Property and Intellectual Capital
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