Research On Licensing Strategy Of Patent

For a patentee, it is vital to find a good licensing strategy to gain more profits form the patent. This paper aiming at frameworks where firms compete in price, in homogenous or heterogeneous outputs, where downstream firms rely on upstream firm's output and where asymmetry information exists, analyses the licensing strategy form from the microcosmic lay, and presents the optimal licensing contract, which corrects, extends or deepens some existing results. The main conclusion as following:This paper corrects the result in literature where the patentee firm chooses its price so as to maximize profit from products, and then chooses license fee to maximize its total profit, and then draw the conclusion that not only non-drastic patent, but also drastic patent should be licensed. It also extending licensing contract to fee plus royalty, presents the optimal contract for an outsider as well as an insider. When locations of the firms are endogenous, it in virtue of some literatures about results where firms compete location then price, analyses the licensing strategy for an insider. It takes for it's better for the patentee firm to license its patent through a two-part tariff contract in spite of the magnitude of the patent, and maximum differentiation will always appear. Otherwise, it analyses the licensing contract where firms practice price- discrimination.It corrects the existing result about the licensing strategy for a patentee who owns a demand innovation in a framework where firms compete in output. For an outsider, the profit he can gain form the patent is a fixed value, and doesn't change according the number of licensing firms and the royalty base. It also analyses the optimal strategy for an insider. If the throughput of the insider is enough, it's unnecessary to license patent. But if the throughput is poor, licensing the patent brings more profit.Through extending standard model about firms competes in output, it analyses licensing strategy when firms'products are heterogeneous, or the upstream market is monopolized. When there are differentiated oligopolies, for an insider as well as an outsider, patent should be licensed as much as possible, which is different from homogenous firms. If the upstream market is monopolized, the patentee in downstream licenses patent or not is decided by action sequence, and the follower's patent gains more social welfare, which recruits the existing results.An outsider may not know market demand as clearly as a licensee firm do. Based on this, it analyses screening mechanism on demand innovation patent and craftwork innovation patent, then it weighs information rents and efficiency. If an outsider owns a demand innovation patent, maybe it's better for him to abandon low demand market to save information rents, but if his patent is a craftwork innovation one, opposition appears. The analysis on discrete demand recruits existing literatures. It also bring out the licensing mechanism when market demand is continuous, which extends existing literatures. Finally, it analyses a signaling game in patent licensing. For signaling needs cost, it's not always superior for a patentee with high quality innovation.