Cooperative Marketing Agreements between Competitors: Evidence from Patent Pools

49 Pages Posted: 16 May 2003  

Jean Tirole

University of Toulouse 1 - Industrial Economic Institute (IDEI); University of Toulouse 1 - Groupe de Recherche en Economie Mathématique et Quantitative (GREMAQ); Centre for Economic Policy Research (CEPR)

Marcin Strojwas

Harvard Business School

Josh Lerner

Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2003

Abstract

On numerous occasions, rival firms seek to market goods together, particularly in high-technology industries. This paper empirically examines one such institution: the patent pool. The analysis highlights five findings consistent with the theoretical predictions: (a) pools involving substitute patents are unlikely to allow pool members to license patents independently, consistent with our earlier theoretical work; (b) independent licensing is more frequently allowed when the number of members in the pool grows, which may reflect the increasing challenges that reconciling users? differing technological agendas pose in large pools; (c) larger pools are more likely to have centralized control of litigation, which may reflect either the fact that the incentives for individual enforcement in large pools are smaller or that large pools are more likely to include small players with limited enforcement capabilities; (d) third party licensing is more common in larger pools, consistent with suggestions that such pools were established primarily to resolve the bargaining difficulties posed by overlapping patent holdings; and (e) during the most recent era, when an intense awareness of antitrust concerns precluded many competition-harming patent pools, more important patents were selected for pools and patents selected for pools were subsequently more intensively referenced by others.

Suggested Citation

Tirole, Jean and Strojwas, Marcin and Lerner, Josh, Cooperative Marketing Agreements between Competitors: Evidence from Patent Pools (May 2003). NBER Working Paper No. w9680. Available at SSRN: https://ssrn.com/abstract=406052

Jean Tirole

University of Toulouse 1 - Industrial Economic Institute (IDEI) ( email )

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University of Toulouse 1 - Groupe de Recherche en Economie Mathématique et Quantitative (GREMAQ) ( email )

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Marcin Strojwas

Harvard Business School ( email )

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Josh Lerner (Contact Author)

Harvard Business School - Finance Unit ( email )

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