A Systems Approach to Patent Pool Management: Coordinating Licensing and Administration in Technology Ecosystems

The rapid advancement of new technologies has enabled the patent pool to become a crucial infrastructure within the technology ecosystem. As a multi-layer complex system, patent pool system management not only affects the profits of participants but also shapes the systemic interactions among downstream manufacturers. We develop a game-theoretical model to study the optimal management strategies for the patent pool system by incorporating diverse licensing and administration models. The results indicate that when the operational cost is low, the patent pool system opts for package licensing with self-administration. When the operational cost is high, if the revenue share is low, the system state switches to individual licensing with third-party administration. If the revenue share is high, it shifts to package licensing with third-party administration. Compared to other system states, package licensing with third-party administration prompts manufacturers to increase their outputs, thereby intensifying downstream market competition. As the external patent royalty rate increases, the core patent holder is inclined to lower its royalty rate. We also investigate how system features, such as revenue share, risk cost, and external rate, influence the patent pool system states. Our study offers theoretical and practical insights into the governance of patent pools within complex technology systems.