Cross-Licensing and competition

National audienceWe analyze the competitive effects of bilateral cross-licensing agreements in a setting with many competing firms. We show that firms can sustain the monopoly outcome if they can sign unconstrained bilateral cross-licensing contracts. This result is robust to increasing the number of firms who can enter into a cross-licensing agreement. We also investigate the scenario in which a cross-licensing contract cannot involve the payment of a royalty by a licensee who decides ex post not to use the licensed technology. Finally, policy implications regarding the antitrust treatment of cross-licensing agreements are derived