Abstract
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.
Keywords
Cross-Licensing; Royalties; Collusion; Antitrust and Intellectual Property;
JEL codes
- D43: Oligopoly and Other Forms of Market Imperfection
- L13: Oligopoly and Other Imperfect Markets
- L24: Contracting Out • Joint Ventures • Technology Licensing
- L41: Monopolization • Horizontal Anticompetitive Practices
- O34: Intellectual Property and Intellectual Capital
Replaces
Doh-Shin Jeon, and Yassine Lefouili, “Cross-Licensing and Competition”, TSE Working Paper, n. 15-577, May 19, 2015, revised December 2017.
Doh-Shin Jeon, and Yassine Lefouili, “Cross-Licensing and Competition”, IDEI Working Paper, n. 850, May 19, 2015.
Reference
Doh-Shin Jeon, and Yassine Lefouili, “Cross-Licensing and Competition”, The RAND Journal of Economics, vol. 49, n. 3, 2018, pp. 656–671.
See also
Published in
The RAND Journal of Economics, vol. 49, n. 3, 2018, pp. 656–671