The social welfare problematics of patent pooling by competitors are well known. Competitor patent pooling has the potential to create powerful efficiencies by eliminating holdout problems and blocking positions and reducing transactions costs from licensing negotiations. At the same time, competitors can use patent pools to cartelize in a variety of ways, for example by fixing prices, entrenching patents of dubious validity, and discouraging rivalry for innovation. Determining legal norms capable of capturing the efficiencies without enabling cartels has not proven easy.
Perhaps because of the practical difficulty of separating pro-competitive from anticompetitive pools, antitrust scrutiny has swung from extreme to extreme. An early period of antitrust laxity where arguably anticompetitive pools were permitted gave way to a middle period of antitrust strictness where arguably benign pools were prohibited. Today, US antitrust law has emerged into a more mature period of cautious tolerance of patent pools bounded by increasingly well-defined antitrust norms.
Publication Information & Recommended Citation
Crane, Daniel A. "Patent Pools, RAND Commitments, and the Problematics of Price Discrimination." In Working within the Boundaries of Intellectual Property: Innovation Policy for the Knowledge Society, edited by R. C. Dreyfuss, H. First, and D. L. Zimmerman, 371-94. Oxford: Oxford Univ. Press, 2010.