Changes

# Pricing in downstream production cannot be affected by or discussed by members of the patent pool. [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf].

'''Efficiency''': The creation of patent pools mainly benefits the owners of complementary or essential patents. Complementary patents cover multiple technologies protected by separate patents required for the development of a specific new product, and therefore, necessitate shared licensing [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)]. 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.

'''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.

'''Elimination of Competition''': Opponents criticize patent pools for the potential of anti-competitive behavior and collusion, primarily with regards to substitute patents. Substitute 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 entities holding substitute patents eliminate competition in that particular technological sector, reinforcing the parallels drawn between patent pools and cartels [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)]. Patent pools potentially create a way for companies to share competitively sensitive information, such as pricing, marketing strategies, or R&D information among its members." [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)] For example, R&D information and developments could be shared in grant-back provisions, a requirement that companies share new or downstream technologies and innovations with members of the pool without additional fees.