Public Policy toward Patent Pools

Abstract

The past two decades have seen an explosion of patent awards and litigation across a wide variety of technologies, which numerous commentators have suggested has socially detrimental consequences. Patent pools, in which owners of intellectual property share patent rights with each other and third parties, have been proposed as a way in which firms can address this patent-thicket problem. The paper discusses the current regulatory treatment of patent pools and highlights why a more nuanced view than focusing on the extreme cases of perfect complements and perfect substitutes is needed. It also highlights the importance of regulators' stance toward independent licensing, grantback policies, and royalty control. We also present case-study and large-sample empirical evidence.