Patent Pools and the Dynamic Incentives to R&D

Vianney Dequiedt (1) , Bruno Versaevel (2)

1 GAEL - Laboratoire d'Economie Appliquée = Grenoble Applied Economics Laboratory
2 GATE - Groupe d'analyse et de théorie économique

Patent pools are cooperative agreements between several patent owners to bundle the sale of their respective licenses. In this paper we analyze their consequences on the speed of the innovation process. We adopt an ex ante perspective and study the impact of possible pool formation on the incentives to innovate. Because participation in the creation of a pool acts as a bonus reward on R&D activity, we show that a firm's investment pattern is upward sloping over time before pool formation. The smaller the set of initial contributors, the higher this effect. A pool formation mechanism based on a proposal by the industry and acceptance/refusal by the competition authority may induce overinvestment in early innovations. It also leads a forward looking regulator to delay the clearance date of the pool. This may result in a pool size that is suboptimal from an ex ante viewpoint.

Mots clés: competition policy; licensing; R&D races; research and development

Domaines: Economies et finances

Vianney Dequiedt, Bruno Versaevel. Patent Pools and the Dynamic Incentives to R&D. 2007. ⟨halshs-00142497⟩