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PATENT POOLS AND CROSS‐LICENSING IN THE SHADOW OF PATENT LITIGATION *
Author(s) -
Choi Jay Pil
Publication year - 2010
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2010.00587.x
Subject(s) - incentive , shadow (psychology) , pooling , economics , law and economics , patent troll , business , microeconomics , intellectual property , industrial organization , patent law , law , computer science , political science , psychology , artificial intelligence , psychotherapist
This article develops a framework to analyze the incentives to form a patent pool or engage in cross‐licensing arrangements in the presence of uncertainty about the validity and coverage of patents that makes disputes inevitable. It analyzes the private incentives to litigate and compares them with the social incentives. It shows that pooling arrangements can have the effect of sheltering invalid patents from challenges. This result has an antitrust implication that patent pools should not be permitted until after patentees have challenged the validity of each other's patents if litigation costs are not too large.