Working Paper: NBER ID: w9175
Authors: 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.
Keywords: No keywords provided
JEL Codes: K11; L41; M2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| patent pool (O36) | enhance welfare (I30) |
| independent licensing (L24) | enhance welfare (I30) |
| substitutes in pool (Z29) | reduce overall welfare (D69) |
| independent licensing provisions (L24) | regulatory evaluation of pools (L98) |