Optimal Licensing of Uncertain Patents in the Shadow of Litigation

Amir, Rabah, Encaoua, David and Lefouili, Yassine (2014) Optimal Licensing of Uncertain Patents in the Shadow of Litigation. Games and Economic Behavior, vol.88. pp. 320-338.

Full text not available from this repository.
Official URL: http://tse-fr.eu/pub/28822

Abstract

This paper investigates the choice of a licensing mechanism by the holder of a patent whose validity is uncertain. We provide sufficient conditions of a general nature under which the licensor prefers to use a per-unit royalty contract. In particular we show that this is the case for the holders of weak patents if the strategic effect of an increase in a potential licensee's unit cost on the equilibrium industry profit is positive. The latter condition is shown to hold in a Cournot (resp. Bertrand) oligopoly with homogeneous (resp. differentiated) products under general assumptions on the demands faced by firms. As a byproduct of our analysis, we contribute to the literature on the cost paradox in oligopoly by offering some new insights of independent interest regarding the effects of cost variations on Cournot and Bertrand equilibria.

Item Type: Article
Language: English
Date: November 2014
Refereed: Yes
Uncontrolled Keywords: Licensing mechanisms, Uncertain patents, Patent litigation, Cost comparative statics
JEL codes: D45 - Rationing; Licensing
L10 - General
O32 - Management of Technological Innovation and R&D
O34 - Intellectual Property Rights - National and International Issues
Subjects: B- ECONOMIE ET FINANCE
Divisions: Toulouse School of Economics - TSE
Site: UT1
Date Deposited: 16 Mar 2015 14:53
Last Modified: 18 Oct 2017 15:12
OAI ID: oai:tse-fr.eu:28822
URI: http://publications.ut-capitole.fr/id/eprint/16643

Actions (login required)

View Item View Item