Changes

More recentlyOpponents criticize patent pools for the potential of anti-competitive behavior and collusion, primarily with regards to substitute patents. Substitute or non-essential patents cover competing technologies that can be developed in parallel without risk of infringement [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf]. Patent pools formed between companies holding substitute patents eliminate competition in that particular technological sector. Certain patent pools have been found to share competetitively sensitive information such as marketing and pricing strategies and R&D findings.[http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf] For example, R&D information and developments could be shared in grant-back provisions, where companies share new or downstream technologies and innovations with members of the pool without additional fees. The Department of Justice and Federal Trade Commission stated that patent pools may create barriers to entry for new firms since the required patents will be inaccessible [http://www.justice.gov/sites/default/files/atr/legacy/2007/07/11/222655.pdf (DOJ)] In order to address the concerns raised against patent pools, the Department of Justice (DOJ) has taken steps to standardize patent pools in order to prevent violations of antitrust laws. The DOJ requires the following characteristics for a patent pool:

===Support=== '''Efficiency''': These restrictions allow for patentees and standard setting organizations to maximize the benefits of creating patent pools. The creation of patent pools mainly benefits the owners of complementary and essential patents. Essential patents are patents required for a product or process to meet a given sector's technical standards. Cross-licensing between companies in a patent pool facilitates building upon previous technologies and increases the efficiency of innovation by organizing complementary intellectual property assets under one contract [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)]. Mutually blocking patents often slow technological developments as neither party can make use of its technology without infringing on the other party's patent. By forming a patent pool, both parties can develop substitute technologies without risk of infringement.  '''Cost Reduction''': Companies can also reduce the amount spent on litigation by settling disputes with the creation of patent pools. This would benefit small- and medium-sized businesses that usually cannot afford the costs of expensive litigation. [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)] Transaction costs as well as royalties can also be lowered in a patent pool. ===Criticisms=== '''Elimination of Competition''': Opponents criticize patent pools for the potential of anti-competitive behavior and collusion, primarily with regards to substitute patents. Substitute or non-essential patents cover competing technologies that can be developed in parallel without risk of infringement [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf]. Patent pools formed between companies holding substitute patents eliminate competition in that particular technological sector. Certain patent pools have been found to share competetitively sensitive information such as marketing and pricing strategies and R&D findings.[http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf] For example, R&D information and developments could be shared in grant-back provisions, where companies share new or downstream technologies and innovations with members of the pool without additional fees. Efforts by the DOJ to restrict patent pool abuses and define what a patent pool looks like have begun to reduce the criticisms launched against patent pools. can '''Licensing Practices''': If a patent pool restricts its members from licensing its patents independently, it lowers the incentive to produce alternatives and inflates the costs of goods or technology for consumers. The Department of Justice and Federal Trade Commission stated that patent pools may create barriers to entry for new firms since the required patents will be inaccessible [http://www.justice.gov/sites/default/files/atr/legacy/2007/07/11/222655.pdf (DOJ)] Additionally, downstream products or firms may unknowingly use technology protected by a patent pool.  '''Pricing''': Given agreements between patent holders to reduce royalties, there may be collusion to fix higher prices for consumers. Technology may become inaccessible to a large number of consumers, hurting the overall public good.