Study On Mechanism Of Patent Licensing Based On Asymmetric Information

With the increasingly fierce competition based on innovation, the swift technology development and the more perfect protection on intellectual property, patent licensing has become one of the most important channels for technology transfer. Patent licensing, virtually is a contract with which a patent holder transfers the use of his patent to the licensees. Thus, licensing behavior is essentially a behavior of mechanism design. How to design an efficient licensing mechanism? This is one hot topic for the present theoretical study of patent. However, after sorting out the theoretical documents, we have found that although more and more experts have recognized the significance of asymmetric information on patent licensing, their exploitation of this field is not in deep enough. One the other hand, they always assume that negotiation is a pricing mechanism of patent use, but related practice shows that auctioning licenses has becomes an active attempt and exploration to broaden channels for technology transfer. It is these two limitations that has displayed in the practice of patent licensing. Hence, this thesis, based on the asymmetric information and the principal-agent relation between a patent holder and potential licensees in the course of licensing, is to provide a further study for solving the problems in the course of the licensing. Centered on the goal, many constructive conclusions have been drawn.This thesis spreads out in the following chapters.Chapter One is a brief introduction to the thesis, including the relative background information, the academic significance, the content and the basic thought of the thesis, as well as the comments of the relative methods of the theoretical research.Formal analyses of the thesis can be divided into two parts. Focusing on the two persons'interaction between the licensor and the only potential licensee, the first part mainly analyzes mechanism of licensing, including the optimal contract when the licensee has the asymmetric information, repeated game and the reputation mechanism when the private information lies in the licensor and moral hazard problem in the course of licensing. The first part includes Chapter Two, Chapter Three and Chapter Four.Chapter Two analyses the optimal licensing contract under uniform pricing and optimal contract combination under price discrimination, on the condition that the licensee has the private information about his own production cost.Chapter Three analyses the case that licensor has information advantage about the quality of invention by building up a will infinite reputation repeated game between the licensor and the licensee.Through analyzing the model, the condition of reputation effects can reducing the asymmetric information comes out.Chapter Four generally discusses the double moral hazard problems involved in the technology transfer. And we depict the characteristics of optimal licensing contract in preventing moral hazard. Then, aiming at special case about universities'transferring their technology though patent licensing, a game model based on moral hazard is built up and incentive together with restraint mechanisms for inventors is analyzed in detail.Focusing on the interactions among the patent holder and the multi-licensees coming from the same competitive industry, the second part of the thesis, including Chapter Five& Chapter Six mainly studies the licensing behavior by auctioning licenses, which includes a licenses'optimal auction mechanism based on negative externality and a license's auction model based on signaling.Chapter Five firstly analyzes the negative externality induced by licensing when potential licensees from the same competitive industry. Then, founded on the externality, an optimal auction mechanism of licenses is designed. Hence, the distortion of externality on licensing behavior is analyzed.On the assumption that they have private information about their own innovation size, Chapter Six deals with the case that the potential licensees'signal by their biddings. And the effects on performance and allocative efficiency of an auction imposed by licensees'signaling motivation are also analyzed. The inclusions are instructive in related auction practice.The innovation of this paper lies in:Firstly, using a repeated game framework, study the role of reputation effect in reducing asymmetric information when the patent holder has private information in course of the licensing. It shows that under some conditions reputation will motivate the patent holder"shelve"some of the projects, thus reducing the asymmetric information problem and accelerating technology transfer, if only he has available a sequence of inventions by achieving inventions continuously. This conclusion provides a new theoretical argument on the the role of some technology transfer intermediaries, such as our country's national technology transfer centers in promote science and technology fruits'commercialization.Secondly, aiming at the case universities commercialize their patents through licensing, develop a game model of patent licensing based on moral hazard coexisting in the inventor and the licensee, which shows that it is the moral hazard leading to inefficiency of patents implement. Following this argument, some incentive and restraint mechanisms on inventors are brought forward. The results indicate that sponsor outlay for inventors'continuous researches can not provide any incentives, but contracts based on output can motivate inventors by reflecting their residual rights. Besides this, increasing proportion of licensing revenue an inventor can enjoy will promote the cooperation between them.Thirdly, examine two problems about auctioning patent licenses on the premise that the potential licensees coming from the same competitive market. On the first place, we analyze the negative externality induced by licensing. Based on it an optimal auction mechanism is provided. In the optimal licensing mechanism it is shown that externalities can make licensors ask for high reservation price, thus baffling the dissemination of innovation knowledge. On the second place, builds up an incomplete information dynamic game model to examine licensees'tactical bidding behavior under their signaling motivation. Then, we analyze the effects of tactical bidding on performance and allocative efficiency of an auction.