Licensing weak patents

David Encaoua () and Yassine Lefouili ()
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Yassine Lefouili: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: In this paper, we revisit the issue of licensing ‘weak' patents under the shadow of litigation. Departing from the seminal paper by Farrell and Shapiro [2008], we consider innovations of any size and not only ‘small' innovations, and we allow the number of licensees to be less than the number of firms in the downstream industry. It is shown that the optimal two-part tariff license from the patent holder's perspective may either deter or trigger litigation, and conditions underwhich each case arises are provided. We also reexamine the claim that the licensing revenues from ‘weak' patents overcompensate the patent holder relative to what a natural benchmarkwould command. Finally we suggest two policy levers that may alleviate the harm raised by the licensing of ‘weak' patents.

Keywords: Licensing Schemes; Probabilistic Rights; Patent Litigation; Mécanismes de licences de brevets; droits probabilistes; litige (search for similar items in EconPapers)
Date: 2009-09
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00415747v1
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Citations: View citations in EconPapers (17)

Published in Journal of Industrial Economics, 2009, 57 (3), pp.492-525. ⟨10.1111/j.1467-6451.2009.00386.x⟩

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Related works:
Journal Article: LICENSING ‘WEAK’ PATENTS* (2009)
Working Paper: Licensing 'weak' patents (2009)
Working Paper: Licensing weak patents (2009)
Working Paper: Licensing weak patents (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00415747

DOI: 10.1111/j.1467-6451.2009.00386.x

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