Licensing Essential Patents: The Non‐Discriminatory Commitment and Hold‐Up

Li, Youping; Shuai, Jie

doi:10.1111/joie.12177

Cited by 6 publications

(6 citation statements)

References 37 publications

(37 reference statements)

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“…Layne‐Farrar et al (2009) argue that the ND component is critical to ensuring reasonable royalties, especially for licensees contracting ex post. Li and Shuai (2019) show that the ND commitment alleviates the hold‐up problem and leads to higher investments by implementers. In our framework, the ND component plays a marginal role; allowing the SEP holder to set discriminatory royalties only marginally improves its ability to license its technology.…”

Section: Related Literaturementioning

confidence: 99%

“…Most of the literature on FRAND licensing focuses on the "fair and reasonable" part of the commitment and ignores the "non-discriminatory" (ND) part. Two exceptions are Layne-Farrar et al (2009) and Li and Shuai (2019). Layne-Farrar et al (2009) argue that the ND component is critical to ensuring reasonable royalties, especially for licensees contracting ex post.…”

Section: Introductionmentioning

confidence: 99%

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Licensing standard‐essential patents with costly enforcement

Ferraz

Ménière

2023

Economics Manag Strategy

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We study the interaction between the holder of a standard‐essential patent (SEP) and two downstream firms using the patented technology to design standard‐compliant products. The SEP holder approaches the downstream firms simultaneously in the shadow of patent litigation and is subject to fair, reasonable, and non‐discriminatory licensing requirements. We show that the patent holder faces a litigation credibility constraint and a license acceptability constraint when setting its licensing terms. For patents of intermediate strength, there is no royalty that allows the patent holder to reconcile these constraints. Consequently, it cannot license its technology and must go to court against infringers. We show that the availability of an injunction improves the patent holder's ability to license its technology, but it tends to inflate the royalty rate for implementers.

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Section: Related Literaturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Licensing standard‐essential patents with costly enforcement

Ferraz

Ménière

2023

Economics Manag Strategy

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“…See for instance the recent contributions by Kim and Sim (2015), Dertwinkel-Kalt et al (2015) and, under downstream vertical differentiation, Chen (2017) and Brito et al (2019). In a model with R&D, Li and Shuai (2019) show that a non-discriminatory input pricing might alleviate the hold-up problem. 12 As pointed out by Inderst and Valletti (2009), linear pricing is prevalent in the UK grocery market.…”

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confidence: 99%

Asymmetric input contracts under price leadership

Escrihuela‐Villar

Ferrarese

2021

The Manchester School

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“…1313This is a common setting in the vertical markets literature; see Y. Li and Shuai (2019) and the literature cited there for example.…”

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confidence: 99%

“…This is a common setting in the vertical markets literature; see Y Li and Shuai (2019). and the literature cited there for example.14 To our knowledge, most papers in the literature focus on the competitive effects of cross holdings (both horizontally and vertically), and the resulting welfare implications, such asGilo et al (2006),Greenlee and Raskovich (2006), S Li et al (2015),.…”

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confidence: 99%

Upstream market structure and downstream partial ownership

Shuai

Xia

Zeng

2022

Economics Manag Strategy

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Existing studies on partial ownership usually overlook the effects of vertically related markets. Our paper highlights the importance of the upstream market on downstream firms' incentives to acquire partial ownership and the consequent welfare implications. In the main model, we assume that there are three firms in the downstream market, two of which may form a partial ownership arrangement. We find several results that are in contrast to those in the literature. First, the two firms will engage in partial ownership if the upstream market is an oligopoly (triopoly or duopoly). Second, partial ownership may raise total production, consumer surplus, and social welfare.This happens when the upstream market consists of a duopoly and the two firms involved in partial ownership are supplied by different suppliers. Third, the outsider, commonly known as a free rider in the literature, may become a victim of partial ownership. Our results are robust to several extensions, including a general n-firm framework, product differentiation, and uniform pricing by upstream firms. We also provide the conditions under which the curvature of the demand function and the convexity of the cost function motivate firms to form partial ownership. | INTRODUCTIONPartial ownership usually refers to a situation in which a firm acquires minority shares in another, which entitles the acquiring firm to a share in the acquired firm's profits but not in decision rights. Such an arrangement has been widely observed in various industries, such as automobiles (

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Licensing Essential Patents: The Non‐Discriminatory Commitment and Hold‐Up

Cited by 6 publications

References 37 publications

Licensing standard‐essential patents with costly enforcement

Licensing standard‐essential patents with costly enforcement

Asymmetric input contracts under price leadership

Upstream market structure and downstream partial ownership

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