Dark Sides of Patent Pools with Independent Licensing

59 Pages Posted: 15 Dec 2016 Last revised: 8 Nov 2017

See all articles by Akifumi Ishihara

Akifumi Ishihara

University of Tokyo - Institute of Social Science

Noriyuki Yanagawa

University of Tokyo - Faculty of Economics

Date Written: November 7, 2017

Abstract

This study examines the welfare effects of patent pools with independent licensing. We argue that forcing patent pools to allow each individual patent holder to license the technology independently does not necessarily work as a screening tool to select only desirable patent pools. We consider a duopolistic model in which some users demand only specific technologies. We demonstrate that a patent pool with independent licensing enables patent holders to undertake anti-competitive price discrimination. Moreover, since forming a patent pool mitigates the price competition forced by lower grade entrants, combination with independent licensing might worsen welfare further.

Keywords: Patent Pools, Independent Licensing, Bundling, Price Discrimination, Foreclosure

JEL Classification: D43, K21, L13, L41

Suggested Citation

Ishihara, Akifumi and Yanagawa, Noriyuki, Dark Sides of Patent Pools with Independent Licensing (November 7, 2017). Available at SSRN: https://ssrn.com/abstract=2885620 or http://dx.doi.org/10.2139/ssrn.2885620

Akifumi Ishihara (Contact Author)

University of Tokyo - Institute of Social Science

Hongo 7-3-1
Bunkyo
Tokyo, TOKYO 113-0033
Japan

Noriyuki Yanagawa

University of Tokyo - Faculty of Economics ( email )

7-3-1 Hongo, Bunkyo-ku
Tokyo 113-0033
Japan

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