Research On Patent Hold-Up From The Perspective Of Latecomer Firms

In the process of technological progress in China, the domestic enterprises legally introduce advanced technology from foreign leading companies increasingly depend on patent license. In the field of patent licensing, especially from foreign leading enterprises to domestic enterprises, how and how many to charge is in the control of foreign leading companies. Foreign leading enterprises have dominated the superiority status in patent license. The standard patent holder has obvious advantages and powers in the negotiations, these easy to cause the rights abuse, and unreasonable charge in the patent license, resulting in a patent hold-up. In recent years we can see the phenomenon of patent hold-up from the antitrust cases, like Huawei versus IDC and the antitrust investigation into Gualcomm, etc.In this paper, from the angle of the latecomers, a simple model combining the theoretical deductive reasoning and case analysis and using the standard economic theory of Nash Bargaining, is developed to study patent hold-up mechanism and the influence.Take technology gap between later enterprises and leading enterprises and cost advantage for variables, consider the technology gap first, leading the result that the hold-up is reducing with the ehancing of technical ability of latecomers; Then assume the technology gap is fixed, considering the influence of cost advantage, leading the result that the hold-up is reducing with the cut down of cost advantage. Finishing with a three-dimensional figure to comprehensively consider the effect of both, it is concluded that with the increasing ability of the enterprise technology and reducing of cost advantage, the hold-up is lower.Leading enterprises always take the method of ordinary licensing to the late-coming enterprises, that is there are multiple licensees. So the major structure need to be further studied. When "one to many" participants, that is, one patent holder licens to multiple licensees. According to the relationship of competition between the latecomers, respectively using Cournot model and Stark Kerr’s model to find the equilibrium, it is concluded that when the latecomers are equal, the hold-up is less than "one to one",shows that with the increasing of the liensees’ participation, hold-up is decreased; when the latecomers are unequal,the hold-up is higher for superior enterprises than the following companies. Finally I’ll use an example to verify the research conclusion.