Cooperative Marketing Agreements Between Competitors: Evidence from Patent Pools
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ARTICLE SUMMARY
This paper looks at organizations known as “patent pools,” or groups of firms that license patents to one another.
POLICY RELEVANCE
Some worry that patent pools exclude competition, but evidence shows that larger pools are friendly to competition.
KEY TAKEAWAYS
- A “patent pool” is a group of firms that agree to license related patents to one another.
- Pools are more likely to allow firms outside the pool to license pool patents when the patents are not substitutes for one another.
- Pools with more members are:
- More likely to allow nonmember to license pool patents.
- More likely to control any litigation.
- Have more third-party licensing of pool patents.
- Since 1995, some pools were disallowed because of competition policy, so pools focused on more important patents.
- Evidence suggests that pools are mainly to solve problems with overlapping claims to technology, and not to collude.
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About Jean Tirole
Jean Tirole is Honorary Chairman of the Jean-Jacques Laffont - Toulouse School of Economics (TSE) Foundation, Scientific Director of TSE-Partnership, and Honorary Chairman, Executive Committee, of the Institute for Advanced Study in Toulouse (IAST). He is also affiliated with MIT, where he holds a visiting position, and the Institut de France. Professor Tirole’s research covers industrial organization, regulation, finance, macroeconomics and banking, and psychology-based economics.
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About Josh Lerner
Josh Lerner is the Jacob H. Schiff Professor of Investment Banking at Harvard Business School and head of the Entrepreneurial Management unit. He graduated from Yale College with a Special Divisional Major which combined physics with the history of technology. He worked for several years on issues concerning technological innovation and public policy, at the Brookings Institution, for a public-private task force in Chicago, and on Capitol Hill. He then earned a Ph.D. from Harvard's Economics Department.
