Research On Competitive Effects Of Patent Pools Based On Vertical Structure

From1990s, in semiconductors, biotechnology, computer software, and telecommunication fragmented and overlapping patent rights aggravate patent thicket problem, building patent pools could solve the patent thicket problem effectively. With the patent thicket problem more and more worsen, a lot of developed countries advance high-technology industry actively using the patent pools model. After encountered overwhelming attack from DVD3C and DVD6C patent pools, our country cognized clearly the role playing by patent pools based on vertical structure in the development of industry and the threat on our manufacture that is consisted of special manufacturer without core intellectual property from patent pools based on vertical structure. The study of the competitive effects problem of the patent pools based on vertical structure conforms to the trend of the development of the world high-technology industry and corresponds to the conditions of our country. This paper take the significant and widespread patent pools based on vertical structure as studying object, analyzed the building motive of patent pools based on vertical structure, studied the competitive effects problem in traditional goods market and innovation market, and studied the competitive effects problem under the condition of the network effects. Main contributions are as fellows:(1) The building motive of patent pools was studied at first. Patent thickets are consisted of blocking patent and complementary patents; with the Patent thickets aggravating the risk of infringement litigation between the patent holders in the process of commercialization of the goods is increasing. The authorized independently model between each other model making the patents sharing and avoiding infringement litigation could result in hold-up problem, royalty stacking problem and huge transaction cost, while patent pools could avoid these problems, therefore patent pools are superior in solving the patent thickets, the motive of building the patent pools may be attribute to crossing the patent thickets. Furthermore the profit of vertical integrated company on the condition of the patent pools is more than using the authorized independently model between each other, this is the economic motive of building the patent pools; after all pursuing the maximizing the profit is the ultimate target.(2) The competitive effects problem of patent pools based on vertical structure was studied in the traditional goods market by calculating the market performance of the patent pools based on vertical structure and by analyzing how patent pools based on vertical structure influence on the special manufacturers. Standing the point of the company the patent pool is the most effective patent authorized model; And from the society the government should pilot the construction of patent pool, avoid reducing the social welfare by building the patent pools. And the special manufacturers are precluded from the final goods markets under the patent pools based on vertical structure. Therefore the patent pools based on vertical structure are monopolistic; the patent pools based on vertical structure could engender oligarch monopoly market structure.(3) The competitive effects problem of the patent pools based on vertical structure was studied in the innovation market by analyzing how patent pools based on vertical structure influence on the innovation. First, the competitive effects problem of the patent pools based on vertical structure was studied statically by introducing the essential patent output function of the members of a patent pool based on vertical structure. In conclusion, on the condition of dividing the royalty income according to the numeric proportional rules, the patent pool based on vertical structure encourages its members to engage research and development; it has incentive effect to innovation. Second, the competitive effects problem of the patent pools based on vertical structure was studied dynamically under the condition of patent pools establishing grant backs clause. On the condition of the grant backs clause, the innovator of patent pools based on vertical structure could not get the competitive advantage against its rivals by innovating, but its innovation activity could be motivated by increase of the market in correspondence with innovating, but the incentive will decrease with the market development.(4) The competitive effects problem of the patent pools based on vertical structure was studied under the condition of the network effects. On the condition of product differentiation and homogenization the demand of consumer is increasing when the network effects is increasing, network effects promote the social welfare;the profit of the member of patent pools is increasing when the network effects is increasing, it indicated that gaining the profit from the network effects was one of the motives of the company building the patent pool; the special manufacturers are not precluded from the final goods markets under the condition of the network effectsand product homogenization, it indicate that the network effects constrain the monopoly of the patent pools based on the vertical structure.