Patent pools and cross-licensing in the shadow of patent litigation

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Abstract

This article develops a framework to analyze the incentives to form a patent pool or engage in cross-licensing arrangements in the presence of uncertainty about the validity and coverage of patents that makes disputes inevitable. It analyzes the private incentives to litigate and compares them with the social incentives. It shows that pooling arrangements can have the effect of sheltering invalid patents from challenges. This result has an antitrust implication that patent pools should not be permitted until after patentees have challenged the validity of each other's patents if litigation costs are not too large.

Original languageEnglish
Pages (from-to)441-460
Number of pages20
JournalInternational Economic Review
Volume51
Issue number2
DOIs
Publication statusPublished - 2010 May 1

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All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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