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Efficient Patent Pools

Josh Lerner¹; Jean Tirole²

¹ Graduate School of Business, Harvard University, 214 Rock Center, Soldiers Field, Boston, MA 02163,and NBER. · ² Institut d'Economíe Industrielle, University of Toulouse, 21 Allee de Brienne, Toulouse 31000, France, GREMAQ (UMR 5604 CNRS), CERAS (URA 2036 CNRS), Paris, and MIT.

The paper builds a tractable model of patent pools, agreements among patent owners to license sets of their patents. It provides a necessary and sufficient condition for patent pools to enhance welfare and shows that requiring pool members to be able to independently license patents matters if and only if the pool is otherwise welfare reducing. The paper allows patents to differ in importance, asymmetric blocking patterns, and licensors to also be licensees. We undertake some initial exploration of the impact of pools on innovation. The analysis has broader applicability than pools, being relevant to a number of co-marketing arrangements.

DOI

10.1257/0002828041464641

Volume

94 (3)

Pages

691-711

Language

en

Export

BibTeX

Sources

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