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Domestic patenting systems and foreign licensing choices

Tsai, Yingyi; Mukherjee, Arijit

Authors

Yingyi Tsai

Arijit Mukherjee arijit.muherjee@nottingham.ac.uk



Abstract

This paper examines a foreign technology holder’s licensing choices between royalty and fixed-fee scheme. We emphasize that foreign licensor chooses the quality of licensed technology when the licensee country does not implement perfect intellectual property protection for licensor’s technology. We study quality choice as the foreign licensor’s selection for a particular grade of technical skills. We show that fixed fee emerges as the equilibrium licensing scheme when both the transfer of his technology is relatively efficient and the licensee is sufficiently cost competitive in the domestic market, and that royalty licensing prevails otherwise. We further show it need not hold the general belief that welfare in the licensor country unambiguously rise with a stronger patenting system in the licensee country when, in particular, such patenting system in place is sufficiently lax.

Journal Article Type Article
Journal Journal of Economics
Print ISSN 0976-5239
Electronic ISSN 1617-7134
Publisher Kamla-Raj Enterprises
Peer Reviewed Peer Reviewed
APA6 Citation Tsai, Y., & Mukherjee, A. (in press). Domestic patenting systems and foreign licensing choices. Journal of Economics, doi:10.1007/s00712-017-0523-y
DOI https://doi.org/10.1007/s00712-017-0523-y
Keywords Intellectual Property Protection; Licensing; Quality of the licensed technology; Welfare
Publisher URL http://link.springer.com/article/10.1007/s00712-017-0523-y/fulltext.html
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingh.../end_user_agreement.pdf
Additional Information The final publication is available at Springer via http://dx.doi.org/10.1007/s00712-017-0523-y.

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf





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