Patent Pools: Licensing Strategies in the Absence of Regulation

Abstract

Purpose – This chapter examines the licensing behavior of patent pools when they are unconstrained by antitrust rules.

Design/methodology/approach – Patent pools allow competing firms to combine their patents and license them as a package to outside firms. Regulators today favor pools that license their patents freely to outside firms, making it difficult to observe the unconstrained licensing strategies of patent pools. This chapter takes advantage of a unique period of regulatory tolerance during the New Deal to investigate the unconstrained licensing decisions of pools. Archival evidence suggests that – in the absence of regulation – pools may not choose to license their technologies.

Findings/originality/value – Eleven of twenty pools that formed between 1930 and 1938 did not issue any licenses to outside firms. Three pools granted one, two, and three licenses, respectively, to resolve litigation. Six pools issued between 9 and 185 licenses. Archival evidence suggests that the pools studied in this chapter used licensing as a means to limit competition with substitute technologies.

Citation

Lampe, R. and Moser, P. (2012), "Patent Pools: Licensing Strategies in the Absence of Regulation", Kahl, S.J., Silverman, B.S. and Cusumano, M.A. (Ed.) History and Strategy (Advances in Strategic Management, Vol. 29), Emerald Group Publishing Limited, Leeds, pp. 69-86. https://doi.org/10.1108/S0742-3322(2012)0000029007