Grantbacks, Territorial Restraints and the Type of Follow-On Innovation: The "But for..." Defence
P Régibeau and
Economics Discussion Papers from University of Essex, Department of Economics
We analyse the effect of grantback clauses in licensing contracts. While competition authorities fear that grantback clauses might decrease the licensee?s ex post incentives to innovate, a standard defence is that grantback clauses are required for the patent-owner to agree to license its technology in the first place. We examine the validity of this ?but for? defence and the equilibrium effect of grantback clauses on the innovation incentives of the licensee for both non-severable and severable innovations. Under the 2004 EU Technology Transfer Guidelines , and the guidelines for some other jurisdictions, grantback clauses that apply to ?non - severable? (read ?infringing?) innovations are considered to be less controversial than clauses that apply to ?severable? innovations. We show, to the contrary, that grantback clauses do not increase the patent- holder?s incentives to license when non-severable innovations are at stake but they do when severable innovations are concerned ? suggesting that the ?but for? defence might be valid for severable innovations but not for non-severable ones. Moreover we show that, for severable innovations, grantback clauses can increase the range of parameters for which follow-on innovation by the licensee occurs.
New Economics Papers: this item is included in nep-com, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
https://repository.essex.ac.uk/17805/ original version (application/pdf)
Working Paper: Grantbacks, Territorial Restraints, and the Type of Follow-On Innovation: The "But for..." Defense (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:esx:essedp:17805
Ordering information: This working paper can be ordered from
Discussion Papers Administrator, Department of Economics, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, U.K.
http://www.essex.ac. ... /papers-request.aspx
Access Statistics for this paper
More papers in Economics Discussion Papers from University of Essex, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Essex Economics Web Manager ().