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Patent Pools and Cross-Licensing in the Shadow of Patent Litigation

37 Pages Posted: 11 Nov 2003  

Jay Pil Choi

Michigan State University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

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Date Written: November 2003

Abstract

Most patent pools are formed in the shadow of patent litigation as an attempt to settle disputes in regard to conflicting infringement claims and the validity of patents. To reflect this reality, I develop a simple framework to analyze the incentives to form a patent pool or engage in cross-licensing arrangements in the presence of uncertainty as to the validity and coverage of patents that makes disputes inevitable. I analyze private incentives to litigate and compare them with the social incentives. Antitrust implications of patent pools are considered. The effects of patent pools on third party incentives to challenge the validity of patents and on development incentives are also investigated.

Keywords: patent pools, cross-licensing, complements and substitutes, patent litigation

JEL Classification: O3, L1, L4, D8, K4

Suggested Citation

Choi, Jay Pil, Patent Pools and Cross-Licensing in the Shadow of Patent Litigation (November 2003). CESifo Working Paper Series No. 1070. Available at SSRN: https://ssrn.com/abstract=466062

Jay Pil Choi (Contact Author)

Michigan State University - Department of Economics ( email )

101 Marshall Hall
East Lansing, MI 48824
United States
517-353-7281 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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