Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/202398
Authors: 
Jeitschko, Thomas D.
Zhang, Nanyun
Year of Publication: 
2012
Series/Report no.: 
EAG Discussion Paper 12-5
Abstract: 
The conventional antitrust wisdom is that the formation of patent pools is welfare en- hancing when patents are complementary, since the pool avoids a double-marginalization problem associated with independent licensing. The focus of this paper is on (down- stream) product development and commercialization on the basis of perfectly comple- mentary patents. We consider development technologies that entail spillovers between rivals, and assume that nal demand products are imperfect substitutes. When pool formation facilitates information sharing and either increases spillovers in development or decreases the degree of product di erentiation, patent pools can adversely a ect welfare by reducing the incentives towards product development and product mar- ket competitionven with perfectly complementary patents. This modi es and even negates the conventional wisdom for some settings and suggests why patent pools are uncommon in science-based industries such as biotech and pharmaceuticals, despite there being frequent policy advocacy for them.
Subjects: 
Patent Pools
Research and Development
Innovation
BioTechnology
Electronics
JEL: 
L1
L2
L4
L6
D2
D4
Document Type: 
Working Paper
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