On the inefficiencies of anti-stacking royalty clauses

Maxim Sinitsyn

Economics Letters, 2022, vol. 221, issue C

Abstract: When negotiating with multiple licensors, anti-stacking royalty clauses allow the licensee to reduce its payment to the original licensor in proportion to the royalty rate of subsequent licensors. I show that these clauses increase the licensing burden on the licensee and lead to higher prices and smaller output. The licensee and the original licensor could increase the profits of all parties by removing the anti-stacking clause.

Keywords: Licensing; Royalty stacking; Anti-stacking clause; Ad valorem rates (search for similar items in EconPapers)
JEL-codes: D43 D45 L14 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:221:y:2022:i:c:s0165176522003640

DOI: 10.1016/j.econlet.2022.110890

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