Redefining Intra-brand Licensing: Can Vertical Differentiation Transform Patent Strategies?
摘要
This paper explores the potential for technology licensing between intra-brand competitors amid inter-brand competition. By integrating the role of vertical differentiation in the framework, we get some contrasting results from the existing literature. We find that when innovation is non-drastic the optimal license contract for a given size of innovation is (i) a royalty alone or a two-part tariff depending on the interval of quality (net of cost) of the superior brand, when the inter-brands are distant to moderate substitutes (ii) a two-part tariff, when inter-brands are moderate to close substitutes. Regardless of the degree of substitution, we find only fixed-fee licensing contract is optimal when the size of innovation is relatively small. Additionally, we also identify the existence of an optimal tariff that can induce technology licensing.