In a patent infringement suit, the alleged infringer wins with a ruling of either patent invalidity or non-infringement. It is ambiguous which of these outcomes is preferred by the alleged infringer. Invalidity may increase current-period competition, but simultaneously removes constraints to...

One prong of the antitrust litigation against Microsoft Corporation challenges the terms under which Microsoft has licensed its Windows operating system to computer manufacturers (OEMs). Plaintiffs complain that the license agreements' requirement that the first screen to appear when customers...

One prong of the antitrust litigation against Microsoft Corporation challenges the terms under which Microsoft has licensed its Windows operating system to computer manufacturers (OEMs). Plaintiffs complain that the license agreements' requirement that the first screen to appear when customers...

Patent nonuse occurs when a patentee fails to commercialize its patent, such as when the patent has no present commercial value or when attempts to license it have been unsuccessful. Patent nonuse may have anticompetitive purposes as well, and will lead to technology suppression when a patented...

We model “patent privateering”—whereby producing firms sell patents to patent assertion entities (PAEs) which then license them under the threat of litigation—in a bargaining game. PAEs can negotiate higher licensing fees than producing firms, because they cannot be counter-sued for...

We investigate patent litigation, settlements and R&D incentives on a market where two firms develop technologies of differentiated products. Firms may sell IP rights to a Patent Assertion Entity (PAE) that acts as intermediary for patent monetization. We find that the effects of this so-called...

Many high technology goods are based on standards that require several essential patents owned by different IP holders. This gives rise to a complements and a double mark-up problem. We compare the welfare effects of two different business strategies dealing with these problems. Vertical...

The conventional wisdom is that the formation of patent pools is welfare enhancing when patents are complementary, since the pool avoids a double-marginalization problem associated with independent licensing. This conventional wisdom relies on the effects that pooling has on downstream prices....

An extensive literature has investigated the effect of market structure on innovation. A persistent concern is that market structure may be endogenous to innovation. Firms may choose to merge so as to capture information spillovers or they may choose to merge so as to dampen competition in...

Licensing technology essential to a standard can present a hold-up problem. After designing new products incorporating a standard, a manufacturer could be confronted by an innovator asserting patent rights to essential technology. A damages remedy provided by antitrust or some other body of law...