Patent Pools and the Dynamic Incentives to R&D

Bruno Versaevel () and Vianney Dequiedt ()
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Bruno Versaevel: EM Lyon, GATE CNRS

No 703, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: Patent pools are cooperative agreements between several patent owners to bundle the sale of their respective licenses. In this paper we analyze their consequences on the speed of the innovation process. We adopt an ex ante perspective and study the impact of possible pool formation on the incentives to innovate. Because participation in the creation of a pool acts as a bonus reward on R&D activity, we show that a firm’s investment pattern is upward sloping over time before pool formation. The smaller the set of initial contributors, the higher this effect. A pool formation mechanism based on a proposal by the industry and acceptance/refusal by the competition authority may induce overinvestment in early innovations. It also leads a forward looking regulator to delay the clearance date of the pool. This may result in a pool size that is suboptimal from an ex ante viewpoint.

Keywords: competition policy; licensing; R&D races; research and development (search for similar items in EconPapers)
JEL-codes: L51 O32 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2007-01
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr, nep-pr~ and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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ftp://ftp.gate.cnrs.fr/RePEc/2007/0703.pdf (application/pdf)

Related works:
Working Paper: Patent Pools and the Dynamic Incentives to R&D (2007)
Working Paper: Patent pools and the dynamic incentives to R&D (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:0703

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