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Patent Pools in Input Markets

Markus Reisinger and Emanuele Tarantino

No 11512, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We show that patent pools formed by owners of perfectly complementary patents are anticompetitive if one of the licensors is integrated with a manufacturer. With vertical integration, the pool serves as coordination device, allowing patent holders to restrict supplies to the product market and share the larger profits of the affiliated manufacturer. These results are robust to entry, the contractual and competitive environments. The imposition of an unbundling and pass-through requirement makes patent pools socially desirable. We also show that this requirement is more effective than a mandated non-discriminatory policy enforcing FRAND commitments in screening anticompetitive pools.

Keywords: Antitrust Policy; Complementary Patents; FRAND; Patent Pools and Joint Marketing Agreements; Vertical Integration and Restraints (search for similar items in EconPapers)
JEL-codes: K11 L41 M2 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-com, nep-cta, nep-ino, nep-ipr and nep-law
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