We examine third-party clearinghouses that license innovations on behalf of inventors when downstream uses require licenses to multiple complementary innovations. We consider two simple clearinghouse royalty redistribution schemes, and two different innovation environments. We show that in most...

We analyse the basic economic issues relating to third-party intellectual property clearinghouses that act as licensing intermediaries. We identify economic functions of clearinghouses and discuss ways that they can improve efficiency in licensing through centralisation and independence. We then...