Hostname: page-component-7479d7b7d-qs9v7 Total loading time: 0 Render date: 2024-07-12T14:11:37.691Z Has data issue: false hasContentIssue false

R&D Organization: Cooperation or Cross-Licensing?

Published online by Cambridge University Press:  09 January 2015

Get access

Summary

Under the Cross-Licensing system (CL), firms are allowed to trade non cooperatively the results of R&D efforts, and compete in the innovation and production stages. First, the paper proposes a simple modeling of this system. Second, a relevant comparison is made with the Cartelized Research Joint Venture (RJV), the form of R&D cooperation recognized to be the best one.

We prove that the Cross-Licensing system may be socially better than the Cartelized RJV. In terms of antitrust policy, for firms, the most favorable collusion mode is Joint Exploitation. We prove that firms are equally tempted by this mode, whether they are under CL or under Cartelized RJV.

Dans le système des licences croisées, les firmes ont la possibilité de se céder mutuellement et de manière non-coopérative, les résultats de leurs efforts en R&D. Tout d'abord, le papier propose une modélisation simple de ce système. Ensuite, nous comparons ce système avec le « RJV Cartel », une forme de coopération en R&D considérée comme étant la meilleure. Nous montrons que le système de licences croisées peut être meilleur que le RJV cartel, du point de vue du bien-être social. En termes de politique concurrentielle, pour les firmes, le meilleur mode de coopération est l'exploitation jointe. Les firmes sont tentées par ce type de coopération de la même manière, qu'elles opèrent initialement dans un système de licences croisées ou dans un RJV cartel.

Type
Research Article
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2011 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

CES, École Normale Supérieure de Cachan, Paris School of Economics, 61 avenue du Président, Wilson, 94230 Cachan, France. Fax: +33 1 47 40 24 69, e-mail: cabon@sociens.ens-cachan.fr

**

Corresponding author: LIM (Groupe MES)-École Polytechnique de Tunisie, BP 743, 2078 La Marsa Tunisia. Fax: +216 71 748 843, e-mail: rim lahmandi@yahoo.com

References

Aghion, P. and Howitt, P. (1998), Endogenous Growth Theory. MIT Press.Google Scholar
Amir, R. (2000), “Modelling imperfectly appropriable R&D via spillovers”, International Journal of Industrial Organization, vol. 18, pp. 10131032.Google Scholar
Amir, R., Narrerup, N., Stepanova, A., Egiazarova, E. (2002), “Monopoly versus R&D integrated duopoly”, The Manchester School, vol. 70, pp. 80100.Google Scholar
Amir, R., Evstigneev, I., Wooders, J. (2003), “Noncooperative versus Cooperative R&D with Endogenous Spillover Rates”, Games and Economic Behavior, vol. 42, pp. 183207.Google Scholar
Anand, B.N. and Khanna, T. (2000), “The structure of licensing contracts”, Journal of Industrial Economics, vol. 67, pp. 103135.Google Scholar
Arora, A. and Fosfuri, A. (2003), “Licensing the market for technology”, Journal of Economic Behavior & Organization, vol. 52, 2, pp. 277295.Google Scholar
Arrow, K.J (1962), “Economic welfare and the allocation of ressources for invention”, in Nelson's, (eds), The Rate and Direction of Inventive Activity: Economic and Social Factors, NBER, Princeton University Press, Princeton.Google Scholar
Atallah, G. (2006), “Defecting from R&D Cooperation”, Australian Economics Papers, vol. 45, pp. 204226.Google Scholar
Brenner, S. (2009), “Optimal formation rules for patent pools”, Economic Theory, vol. 40(3), pp.373388.Google Scholar
Brod, A. and Shivakumar, R. (1997), “R&D cooperation and the joint exploitation of R&D”, Canadian Journal of Economics, vol. 30, pp. 673684.Google Scholar
Cabon-Dhersin, M. L. and Ramani, S. V. (2004), “Does Trust Matter for R&D Cooperation? A game theoretic examination”, Theory and Decision, vol. 57, pp. 11331137.Google Scholar
Cabral, L. (2000), “R&D Cooperation and Product Market Competition”, International Journal of Industrial Organization, vol. 18, pp. 10331047.Google Scholar
Choi, J. P. (2002), “A Dynamic analysis of licensing: the “Boomerang” effect and grant-back clauses”, International Economic Review, vol. 43, 3, pp. 803829.Google Scholar
d'Aspremont, C. and Jacquemin, A. (1988), “Cooperative and noncooperative R&D in duopoly with spillover”. American Economic Review, vol. 78, pp. 11331137.Google Scholar
d'Aspremont, C. and Jacquemin, A. (1990), “Cooperative and noncooperative R&D in duopoly with spillover: erratum”. American Economic Review, vol. 80, pp. 641642.Google Scholar
de Bondt, R. (1997), “The degree of spillovers and the number of rivals for maximum effective R&D”, International Journal of Industrial Organization, vol. 15, pp. 129.Google Scholar
de Bondt, R., Slaets, P. and Cassiman, B. (1992), “The degree of spillovers and the number of rivals for maximum effective R&D”, International Journal of Industrial Organization, vol. 10, pp. 3554.Google Scholar
Eswaran, M. (1994), “Cross-Licensing of competing patents as a facilitating device”, Canadian Journal of Economics, vol. 27, pp. 689708.Google Scholar
Fauli-Oller, R. and Sandonis, J. (2003), “To merge or to license: implications for competition policy”, International Journal of Industrial Organization, vol. 21, 5, pp. 655672.Google Scholar
Fershtman, C. and Kamien, M. I. (1992), “Cross-Licensing of complementary technologies”, International Journal of Industrial Organization, vol. 10, pp. 329348.Google Scholar
Gersbach, H. and Schmutzler, A. (2003), “Endogenous spillovers and incentives to innovate”, Economic Theory, vol. 21, pp. 5979.Google Scholar
Kamien, M. (1992), “Patent Licensing”, in Aumann, R. J. and Hart, S. (eds), Handbook of Game Theory, vol. 1, Elsevier Science Publishers, Amsterdam, pp. 332354.Google Scholar
Kamien, M., Muller, E. and Zang, I. (1992), “Research joint ventures and R&D cartel”, American Economic Review, vol. 82, pp. 12931306.Google Scholar
Kamien, M., Tauman, Y. (1986), “Fees versus royalties and the private value of a patent”, Quaterly Journal of Economics, vol. 101, pp. 471492.Google Scholar
Kato, A. (2004), “Patent pool enhances market competition”, International Review of Law and Economics, vol. 24, 2, pp. 255268.Google Scholar
Katsoulacos, Y. and Ulph, D. (1998), “Endogenous innovation spillovers and Technology policy”, Journal of Industrial Economics, vol. 46, pp. 333357.Google Scholar
Katz, M. L., Shapiro, C. (1986), “How to licence intangible property”, Quaterly Journal of Economics, vol. 101, pp. 567590.Google Scholar
Kesteloot, K. and Veugelers, R. (1995), “Stable R&D cooperation with spillovers”, Journal of Economics and Management Strategy, vol. 4, pp. 651672.Google Scholar
Klein, J. I. (1997) ‘Cross-licensing and Antitrust law’, Speech before the American Intellectual Property Law Association, in www.vsdoj.gov/atr/public/speeches/speeches.htm.Google Scholar
Kogut, B. (1989), ‘The Stability of Joint-Ventures: reciprocity and competitive rivalry”, Journal of Industrial Economics, vol. 38, pp. 183198.Google Scholar
Lambertini, L., Poddar, S. and Sasaki, D. (2002), “Research Joint Ventures, product differenciation and price collusion”, International Journal of Industrial Organization, vol. 20, pp. 829854.Google Scholar
Lerner, J., Strojwas, M. and Tirole, J. (2007), “The design of Patent pools: the determinants of licensing Rules”, The RAND Journal of Economics, vol. 38, pp. 610625.Google Scholar
Lerner, J. and Tirole, J. (2004), “Efficient Patent Pools”, American Economic Review, vol. 94, pp. 691711.Google Scholar
Li, C. and Song, J. (2009), “Technology Licensing in a vertically differentiated duopoly”, Japan and the World Economy, vol 21(2), pp. 183190.Google Scholar
Martin, S. (1996), “R&D joint ventures and Tacit product market collusion”, European Journal of political Economy, vol. 11, pp. 733741.Google Scholar
Motta, M. (1992), “Cooperative R&D and vertical product differenciation”, International Journal of Industrial Organization, vol. 10, pp. 643661.Google Scholar
Nagaoka, S. and Kwon, H. (2006), “The incidence of cross-licensing: A theory and new evidence on the firm and contract level determinants”, Research Policy, vol. 35, 9, pp. 13471361.Google Scholar
Pastor, M. and Sandonis, J. (2002), “Research joint ventures vs. cross licensing agreements: an agency approach”, International Journal of Industrial Organization, vol. 20, pp. 215249.Google Scholar
Piga, C. and Poyago-Theotoky, J. (2005), “Endogenous R&D spillovers and locational choice”, Regional science and urban economics, vol. 35, pp. 127139.Google Scholar
Poyago-Theotoky, J. (1999), “A note on endogenous spillovers in a non-tournament R&D duopoly”, Review of Industrial Organization, vol. 15, pp. 253262.Google Scholar
Rostoker, J. (1984), “A survey of Corporate Licensing”, IDEA 24-5992.Google Scholar
Shapiro, C. (2001), “Navigating the patent thicket: Cross-Licences, patent pools and standard setting”, in Jaffe, A., Lerner, J. and Stern, S. (eds), Innovation Policy and the Economy, MIT Press.Google Scholar
Stamatopoulos, G. and Tauman, Y. (2008), “Licensing of a quality-improving innovation”, Mathematical Social Sciences, vol. 56, 3, pp. 410438.Google Scholar
Suzumura, K. (1992), “Cooperative and noncooperative R&D in an oligopoly with spillovers”, American Economic Review, vol. 32, pp. 13071320.Google Scholar
Tesoriere, A. (2008), “A further note on endogenous spillovers in a non-tournament R&D duopoly”, Review of Industrial Organization, vol. 33, pp. 177184.Google Scholar
U.S. Department of Justice and Federal Trade Commission (1995), Antitrust Guidelines for the Licensing of Intellectual Property. April.Google Scholar