Cross-Licensing and Competition

34 Pages Posted: 7 Oct 2013

See all articles by Doh-Shin Jeon

Doh-Shin Jeon

Toulouse School of Economics (TSE); Centre for Economic Policy Research (CEPR)

Yassine Lefouili

University of Toulouse 1 - Toulouse School of Economics (TSE)

Multiple version iconThere are 2 versions of this paper

Date Written: September 30, 2013

Abstract

We study bilateral cross-licensing agreements among N(> 2) firms that engage in competition after the licensing phase. It is shown that the most collusive cross- licensing royalty, i.e. the one that allows the industry to achieve the monopoly pro.t, is sustainable as the outcome of bilaterally efficient agreements. When the terms of cross-licensing agreements are not observable to third parties, the monopoly royalty is the unique symmetric bilaterally efficient royalty. However, when the terms of the agreements are public, the most competitive royalty (i.e. zero) can also be bilaterally efficient. Policy implications regarding the antitrust treatment of cross-licensing agreements are derived from these results.

Keywords: Cross-Licensing, Collusion, Antitrust and Intellectual Property

JEL Classification: L44, O33, O34

Suggested Citation

Jeon, Doh-Shin and Lefouili, Yassine, Cross-Licensing and Competition (September 30, 2013). NET Institute Working Paper No. 13-11, Available at SSRN: https://ssrn.com/abstract=2335724 or http://dx.doi.org/10.2139/ssrn.2335724

Doh-Shin Jeon (Contact Author)

Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Yassine Lefouili

University of Toulouse 1 - Toulouse School of Economics (TSE)

1 Esplanade de l’Université
Toulouse, F-31000
France

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