Licensing and Royalty Contracts for Copyright

17 Pages Posted: 11 Jun 2008

See all articles by Richard Watt

Richard Watt

University of Canterbury - Economics and Finance; The Society for Economic Research on Copyright Issues (SERCI)

Abstract

This paper reviews briefly how the owner of the copyright to a creation can best market access to that right to licensees under a variety of assumptions concerning the market. After an introductory section, the paper considers a situation of full certainty, in which the value of the final product that is sold by licensees is fully deterministic. In that setting, we consider a very simple model in which the copyright holder himself may or may not compete with the licensee in the final product market. Above all, it is shown that a linear form for the royalty contract always suffices in equilibrium. After that, a model with certainty as to the market value of the final product is developed. In this model, we consider Pareto efficient sharing contracts, and it is shown that now a linear form is unlikely to suffice. Throughout (i.e. in both sections), we shall be interested in exactly when a linear royalty contract is efficient, since these types of contract are so prevalent in the real world.Finally, as an introduction to the papers contained in the symposium, I devote a few words to each of them in turn.

Keywords: Licensing, Royalty, Copyright

Suggested Citation

Watt, Richard, Licensing and Royalty Contracts for Copyright. Review of Economic Research on Copyright Issues, Vol. 3, No. 1, pp. 1-17, 2006, Available at SSRN: https://ssrn.com/abstract=1143822

Richard Watt (Contact Author)

University of Canterbury - Economics and Finance ( email )

Private Bag 4800
Christchurch
New Zealand

The Society for Economic Research on Copyright Issues (SERCI) ( email )

Apartado de correos 1100
Palma de Mallorca, 08080
Spain

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
281
Abstract Views
1,494
Rank
197,977
PlumX Metrics