Patent pool enhances market competition

Research output: Contribution to journalArticle

10 Citations (Scopus)

Abstract

This article investigates a pool of substitute patents that enable firms to reduce marginal costs of production. Contrary to the general belief, it is shown that a pool of substitute patents may promote competition under certain conditions, thereby enhancing social welfare in the product market. The intuition is that when firms compete in licensing fees, resultant low licensing fees discourage firms from licensing to outside firms. This leads to fewer licensees than when a patent pool is formed.

Original languageEnglish
Pages (from-to)255-268
Number of pages14
JournalInternational Review of Law and Economics
Volume24
Issue number2
DOIs
Publication statusPublished - 2004 Jun
Externally publishedYes

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Keywords

  • Market competition
  • Patent pool

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance
  • Law

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