Optimal licensing of uncertain patents in the shadow of litigation

Amir, Rabah; Encaoua, David; Lefouili, Yassine

doi:10.1016/j.geb.2014.09.009

Cited by 26 publications

(23 citation statements)

References 42 publications

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“…"> A2 .

P false(0 false) > \bar{c} > \underset{̲}{c} > P false(Q false)

for Q sufficiently large. A3 .

P^{'} false(Q false) + Q P^{''} false(Q false) < 0

for all

Q \geq 0

with

P (Q) > 0

. These mild assumptions ensure the existence and uniqueness of a Cournot equilibrium

{false(q_{i}^{*} false)}_{i = 1, \dots, n}

satisfying the following (intuitive) comparative statics properties, where

c_{i}

denotes firm i 's marginal cost (see, e.g., Amir, Encaoua, and Lefouili, ): (i)

\frac{\partial q_{i}^{*}}{\partial c_{i}} < 0

and

\frac{\partial q_{i}^{*}}{\partial c_{j}} > 0

for any

j \neq i

;

\frac{\partial Q^{*}}{\partial c_{i}} < 0

for any i , where

Q^{*} = \underset{i}{0true \sum} q_{i}^{*}

is the total equilibrium output; (ii)

\frac{\partial π_{i}^{*}}{\partial c_{i}} < 0

and

\frac{\partial π_{i}^{*}}{\partial c_{j}} > 0

for any

j \neq i

, where

π_{i}^{*}

is firm i 's equilibrium profit. …”

Section: Baseline Modelmentioning

confidence: 97%

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Cross‐licensing and competition

Jeon

Lefouili

2018

The RAND J of Economics

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We analyze the competitive effects of bilateral cross‐licensing agreements in a setting with many competing firms. We show that firms can sustain the monopoly outcome if they can sign unconstrained bilateral cross‐licensing contracts. This result is robust to increasing the number of firms who can enter into a cross‐licensing agreement. We also investigate the scenario in which a cross‐licensing contract cannot involve the payment of a royalty by a licensee who decides ex post not to use the licensed technology. Finally, policy implications regarding the antitrust treatment of cross‐licensing agreements are derived.

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“…"> A2 .

P false(0 false) > \bar{c} > \underset{̲}{c} > P false(Q false)

for Q sufficiently large. A3 .

P^{'} false(Q false) + Q P^{''} false(Q false) < 0

for all

Q \geq 0

with

P (Q) > 0

. These mild assumptions ensure the existence and uniqueness of a Cournot equilibrium

{false(q_{i}^{*} false)}_{i = 1, \dots, n}

satisfying the following (intuitive) comparative statics properties, where

c_{i}

denotes firm i 's marginal cost (see, e.g., Amir, Encaoua, and Lefouili, ): (i)

\frac{\partial q_{i}^{*}}{\partial c_{i}} < 0

and

\frac{\partial q_{i}^{*}}{\partial c_{j}} > 0

for any

j \neq i

;

\frac{\partial Q^{*}}{\partial c_{i}} < 0

for any i , where

Q^{*} = \underset{i}{0true \sum} q_{i}^{*}

is the total equilibrium output; (ii)

\frac{\partial π_{i}^{*}}{\partial c_{i}} < 0

and

\frac{\partial π_{i}^{*}}{\partial c_{j}} > 0

for any

j \neq i

, where

π_{i}^{*}

is firm i 's equilibrium profit. …”

Section: Baseline Modelmentioning

confidence: 97%

“…These mild assumptions ensure the existence and uniqueness of a Cournot equilibrium (q * i ) i=1,...,n satisfying the following (intuitive) comparative statics properties, where c i denotes firm i's marginal cost (see, e.g., Amir, Encaoua, and Lefouili, 2014):…”

Section: Baseline Modelmentioning

confidence: 99%

Cross‐licensing and competition

Jeon

Lefouili

2018

The RAND J of Economics

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“…Recently, economists have begun to pay attention to the licensing properties of a process innovation covered by a patent of uncertain validity. Pioneering works in this area include (Amir, Encaoua, & Lefouili, ; Encaoua & Lefouili, ; Farrell & Shapiro, ).…”

Section: Related Literaturementioning

confidence: 99%

Price and quantity competition in an asymmetric duopoly with licensing

Niu

2018

J Public Economic Theory

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By introducing licensing, this study reconsiders the relative dominance of price‐ and quantity‐setting strategies in an asymmetric duopoly. It shows that if the initial cost difference is small or the goods are close substitutes, then both firms will prefer the quantity strategy. Conversely, for the other cases, heterogeneous‐strategy equilibrium will appear, under which the low‐cost firm will choose a price strategy and the high‐cost firm will choose a quantity strategy. With an endogenous mode of market competition, licensing has always proven to be welfare‐improving.

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“…A3 P 0 (Q) + QP 00 (Q) < 0 for all Q 0 with P (Q) > 0. These mild assumptions ensure the existence and uniqueness of a Cournot equilibrium (q i ) i=1;:::;n satisfying the following (intuitive) comparative statics properties, where c i denotes …rm i's marginal cost (see e.g., Amir, Encaoua and Lefouili, 2014): i) @q i @c i < 0 and @q i @c j > 0 for any j 6 = i; @Q @c i < 0 for any i, where Q = X i q i is the total equilibrium output; ii) @ i @c i < 0 and @ i @c j > 0 for any j 6 = i, where i is …rm i's equilibrium pro…t.…”

Section: Settingmentioning

confidence: 99%

Cross-Licensing and Competition

Jeon

Lefouili

2013

SSRN Journal

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We analyze the competitive e¤ects of bilateral cross-licensing agreements in a setting with many competing …rms. We show that …rms can sustain the monopoly outcome if they can sign unconstrained bilateral cross-licensing contracts. This result is robust to increasing the number of …rms who can enter into a cross-licensing agreement. We also investigate the scenario in which a cross-licensing contract cannot involve the payment of a royalty by a licensee who decides ex post not to use the licensed technology. Finally, policy implications regarding the antitrust treatment of cross-licensing agreements are derived.We thank the Co-Editor, Ben Hermalin, and two anonymous referees for very helpful comments and suggestions. We are grateful to

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Optimal licensing of uncertain patents in the shadow of litigation

Cited by 26 publications

References 42 publications

Cross‐licensing and competition

Cross‐licensing and competition

Price and quantity competition in an asymmetric duopoly with licensing

Cross-Licensing and Competition

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