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Patent Pool Licensing Project (view source)
Revision as of 19:36, 12 July 2012
, 19:36, 12 July 2012→Basic Economics
##Network effects
##Substitution protection
##'Show-how'
These reasons may apply more or less in 'robust' versus 'fragile' pools. Each is currently a sketch outline - please add or fix each point as appropriate! Likewise, we should consider if there are reasons why patents held in pools might charge higher rates. Possibilities include:
Particularly when pools are linked to standards, there is the possibility of later substitution. Standards undergo revision, and substituted patents might not be removed from the pool (this is an empirical question). As such, a firm with a weak patent that will be suffer from substitution in the next generation of the technology may have a strong incentive to join the pool. The firm can choose between higher rents for a short duration, or lower rents for the duration of the patent term (or the pool).
==='Show-how'===
Another reason why rates may be lower in pools concerns the need for 'show-how' with certain patents. Although a patent may embody the 'know-how' of a technology, the implementation of a patent can require technology-specific knowledge that is difficult (and hence costly) to transfer. Patent licenses in pools do not make provision for the transfer of show-how (right?), so patents which require costly knowledge transfer will be more likely to be licensed seperately, and at a rate that compenses the patent-holder for its show-how transfer.
=Empirics=
