How Strong Are Weak Patents?

• 成果类型: Article
• 署名作者: Farrell, Joseph; Shapiro, Carl
• 署名单位: University of California System; University of California Berkeley; University of California System; University of California Berkeley
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.98.4.1347
• 发表日期: 2008
• 页码: 1347-1369
• 关键词: transmission; LITIGATION; settlement

摘要

We study the welfare economics of probabilistic patents that are licensed without a full determination of validity. We examine the social value of instead determining patent validity before licensing to downstream technology users, in terms of deadweight loss (ex post) and innovation incentives (ex ante). We relate the value of such pre-licensing review to the patent's strength, i.e., the probability it would hold up in court, and to the per-unit royalty at which it would be licensed. We then apply these results using a game-theoretic model of licensing to downstream oligopolists, in which we show that determining patent validity prior to licensing is socially beneficial.