Research On Licensing Strategy Of Innovator Interacting On The Market Structure Of The Upstream Industry

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.This paper assumes that the firms in the upstream industry have important market power and the downstream market is Stackelberg market or Cournot market,and researches how technique innovator chooses its fee licensing strategy,what condition the potential entrant enters the upstream market and how much raw material they supply. The results show that:there is no incentive for fee licensing in the downstream market if fee licensing cannot change the upstream market structure.There is incentive for fee licensing in the downstream market if fee licensing can change the upstream market structure when the innovation scale belongs a certain range.Then the profit of the downstream market and social welfare is improved.It will be found that the studies here have important meanings for licensing decision of the innovator and industrial policy's making by the government.