In the context of the licensing of standardized technology, Standard-Setting Organization (SSO) has tried to adopt ex ante licensing in recent years in order to prevent patents from hold up and conform to technology licensing. However, up to now, it seems not working properly, and the mechanism for licensing needs to be modified indeed. A model of sequential investment is applied to in a sense of homogeneous investment, firstly the profit and investment incentive of the two licensing parties are characterized, and then double hold-up which is lack of efficiency for the licensing in some case is resulted in. To optimize the licensing procedure, the effect of the enforcement of ex ante licensing on both development and manufacture is investigated, and the applicability of ex ante licensing under the efficient investment is confirmed. Result indicates that (1)the joint expected surplus increases in the ex ante licensing, and the manufacturer's hold-up is solved (2)the short-term enforcement enhances the manufacturer's investment and the value of technology, ex ante licensing is feasible; the long-term enforcement causes R&D deterrence, ex ante licensing is less feasible. Finally, further alone policy suggestion is provided.
Key words
ex ante licensing /
short-term enforcement /
homogeneous investment /
double hold up
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