The Study On The Effect Of Competitive Patent Pools Based On Different Standards

The competition on the upstream market becomes more and more drastic focusing on the patent rights, which leads to the boom of the R & D investment and the number of patents. Single standard and patent pool can not meet the welfare of so many patent holders. So competitive patent pools based on different standards are emerging.In this paper we develop a model where there are 2 competitive patent pools based on different standards, and analyze the market feature, R&D investment of enterprises and the formation of a patent pool. Our conclusion is:under the situation of double competitive patent pools compared with the situation of single patent pool, we have lower prices of products, bigger numbers of products and more profit on downstream market, only the profit on upstream market is lower, And social welfare is better off. In the aspect of R&D investment on patent innovation, we find that due to the existence of grantbacks, the innovation incentive of the enterprises inside the patent pool is cut down, and is weaker than the enterprises outside the double patent pools, but the incentive to innovate improved patents of the opponent patent pool is stronger, they still have a strong incentive to invest add-on innovations. The enterprises which have a large number of patents have stronger innovation incentive.In this paper we also adopt an ex-ante perspective to study the formation of a patent pool based on the massive number of patents and the possibility of existence of double competitive patent pools. We find that the "big enterprises" that have a large number of patents and the potential patent pool attract each other. Big enterprises would rather join the potential patent pool than stay out as a "free rider" and the potential patent pool would like to take the big enterprises into it to avoid the possibility of forming double competitive patent pools.