46 Pages Posted: 15 Sep 2002 Last revised: 18 Dec 2013
Date Written: September 2002
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.
Suggested Citation: Suggested Citation
Tirole, Jean and Lerner, Josh, Efficient Patent Pools (September 2002). NBER Working Paper No. w9175. Available at SSRN: https://ssrn.com/abstract=330314