Patent pools, vertical integration, and downstream competition

Reisinger, Markus; Tarantino, Emanuele

doi:10.1111/1756-2171.12266

Cited by 22 publications

(8 citation statements)

References 47 publications

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“…A patent pool can reduce transaction costs by reducing the number of patent licenses and effectively address complement problems by allowing patent holders to coordinate their behaviors on patent licenses (Delcamp, 2015 ). However, patent pools may be anticompetitive due to the increase in patent royalty if the share of integrated firms is large sufficiently (Reisinger & Tarantino, 2019 ). Under certain circumstances, a patent pool in which patent holders collectively possess strong market power will harm competition in relevant markets.…”

Section: Discussionmentioning

confidence: 99%

Pledging Patent Rights for Fighting Against the COVID-19: From the Ethical and Efficiency Perspective

Yuan

2021

J Bus Ethics

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In response to the great crises of the COVID-19 coronavirus, virtually all new technologies protected by patent rights have been used in practice from diagnostics, therapeutic, medical equipment, and vaccine to prevention, tracking, and containment of COVID-19. However, the moral justification of patent rights is questioned when pharmaceutical patents conflict with public health. This paper proposes a revised approach of deciding on how to address the conflicts between business ethics and patent protections and then compares the different mechanisms of clearing patent thickets. Our findings highlight that patent pledges may not only contribute to achieving the maximized substantive justice of the public but also help patent pledgors fulfill procedural justice. The advantages of patent pledges have attracted many patent holders to make public statements during the COVID-19 pandemic. In contrast, the disadvantages of a free license may make patent pledges not sustainable for a long time without the related supporting measures. Our findings will be helpful for policymakers or company managers to make an appropriate decision on rationally utilizing patent portfolios for fighting against public health crises.

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Section: Discussionmentioning

confidence: 99%

Pledging Patent Rights for Fighting Against the COVID-19: From the Ethical and Efficiency Perspective

Yuan

2021

J Bus Ethics

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“…In a recent study of the impact of drug procurement systems on prices in low-and middle-income countries, Dubois et al (2021) also …nd elasticities in the vicinity of one. 31 In summary, the evidence shows that inclusion in the patent pool promotes entry and di¤usion of essential medicines, but the e¤ect is a combination of di¤erent responses by licensees and patentees. While the MPP is associated with entry of licensees selling higher quantities of products, patentees appear less active in the country once a product enters the MPP.…”

Section: Impact On Salesmentioning

confidence: 98%

Licensing Life-Saving Drugs for Developing Countries: Evidence from the Medicines Patent Pool

Galasso

Schankerman

2024

Review of Economics and Statistics

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We study the effects of the Medicines Patent Pool – an institution that pools patents across geographical markets – on the licensing and adoption of life-saving drugs in low- and middle-income countries. We show that there is an immediate and large increase in licensing when a patent is included in the MPP. There is also evidence that the pool increases actual entry and volume of sales, but these impacts are much smaller than on licensing, which is due to the geographic bundling of licenses. The paper highlights the potential of pools in promoting diffusion of biomedical innovation in developing countries.

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“…This parameter aims to capture some of the reasons that the literature has proposed to reconcile the fact that royalties are used in spite of the double-marginalization they generate. It has been argued that two-part contracts are optimal, for example, as part of a risk-sharing strategy (Bousquet et al [1998]) or in situations where there is downstream competition (Hernández-Murillo and Llobet [2006]; Reisinger and Tarantino [2019]).…”

Section: V(vi) Two-part Contractsmentioning

confidence: 99%

Royalty Stacking and Validity Challenges: The Inverse Cournot Effect*

Llobet,

Padilla

2023

The J Industrial Economics

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This paper shows that the well‐known royalty‐stacking problem is not robust to considering licensors with patents of heterogeneous strength due to the Inverse Cournot effect. The incentives for a downstream producer to challenge a weak patent in court increase when the total royalty rate is lower. The Inverse Cournot effect generates a moderation force in the royalty rate of strong patent holders forcing weak licensors to reduce their royalties to avoid litigation and causing an increase in output. This effect is mitigated when all firms have weak patents, making royalty stacking a more relevant concern in that case.

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Patent pools, vertical integration, and downstream competition

Cited by 22 publications

References 47 publications

Pledging Patent Rights for Fighting Against the COVID-19: From the Ethical and Efficiency Perspective

Pledging Patent Rights for Fighting Against the COVID-19: From the Ethical and Efficiency Perspective

Licensing Life-Saving Drugs for Developing Countries: Evidence from the Medicines Patent Pool

Royalty Stacking and Validity Challenges: The Inverse Cournot Effect*

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