We consider compulsory licensing of intellectual property as a remedy for anti-competitive practices. We identify aspects of intellectual property that could warrant a different remedy from those developed for access to physical essential facilities. Based on the analysis, we present a characterisation of optimal compulsory licensing for a simple market. We find that royalty payments offer a greater range of choices to a regulator than fixed fees. Thus, even though the marginal cost of supplying access to intellectual property is zero, some unit charging is likely to be efficient.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Management, Monitoring, Policy and Law