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...

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...

In a duopoly where both firms produce substitutes, we show that under process innovation, specialization is the equilibrium attained with cross-licensing. Each firm produces only the good for which it has an advantage, and social welfare may improve. Patent pool extension confirms the results.

This paper considers three firms that engage in an R&D contest to develop a new profitable technology. For a broad range of parameters, the firm that leads the contest (i.e., has the highest probability of success) is better-off licensing or selling its superior interim knowledge to one of the...

This paper examines the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation. Recent evidence suggests that semiconductor firms do not rely heavily on patents, despite the strengthening of US patent rights in the early 1980s. Yet the...

We argue that cross-licensing is a device to establish specialization in a multi-product Stackelberg duopoly under process innovation. The optimum licensing contracts are royalty contracts. These are designed so as to implement the joint-profit maximization (monopoly) outcome as the unique Nash...

It is often the case that the introduction of new products and services requires the development of several distinct complementary technologies. These technologies may be independently developed by different firms. Each firm may possess a technology that has a much greater value when combined...