Fuel and leasable minerals mined in the United States have historically been subject to federal royalties while locatable minerals have not. In recent years there have been multiple attempts to alter this policy and subject locatable minerals to federal royalties as well; most recently the preliminary 2011 Obama budget included a gross royalty on hard-rock mining on public lands. This paper ana...

There is considerable controversy about the relative merits of the apportionment rule (which results in per-unit royalties) and the entire market value rule (which results in ad-valorem royalties) as ways to determine the scope of the royalty base in licensing negotiations and disputes. This paper analyzes the welfare implication of the two rules abstracting from implementation and practicabili...

Patent licenses are frequently subjected to antitrust scrutiny, especially when they contain restrictions beyond simple fixed fees and royalties. Clauses that fix the price at which a product is sold have proven contentious, upheld by the courts in some circumstances and rejected in others. No agreement has yet emerged on how to reconcile court decisions and economic rationale. We study the eff...

DISCLOSURE STATEMENT: This was not an industry supported study. Dr. Dort receives royalties from a tongue retaining device (MPowRx) and has financial interest in Zephyr. Dr. Lettieri is on the speakers’ bureau of Teva Pharmaceuticals. Dr. Chervin is a board member of the American Academy of Sleep Medicine, consults for Zansors, and receives royalties from UpToDate and Cambridge University Press...

We consider a model of licensing of a non-drastic innovation in which the patent holder (an outside innovator) negotiates either up-front fixed fees or per-unit royalties with two firms producing horizontally differentiated brands and competing à la Cournot. We investigate how licensing schemes (fixed fee or per-unit royalty) and the number of licenses sold (exclusive licensing or complete tech...

Wind-power development in the U.S. occurs primarily on private land, producing royalties for landowners through private contracts with wind-farm operators. Texas, the U.S. leader in wind-power production with well-documented support for wind power, has virtually all of its ~12 GW of wind capacity sited on private lands. Determining the spatial distribution of royalty payments from wind energy i...

Some recent literature has concluded that patent remedies result in systematically excessive royalties because of holdup and stacking problems. This article shows that this literature is mistaken. The royalty rates predicted by the holdup models are often (plausibly most of the time) below the true optimal rate. Further, those predicted royalty rates are overstated because of incorrect assumpti...

a r t i c l e i n f o JEL classification: D21 D43 D44 D45 Keywords: Patent licensing Insider Asymmetric information Per unit royalty Ad valorem royalty We study an inside patent holder's optimal licensing policy when it has imperfect information about the value of the patent to its rival. The patent holder can choose any two-part licensing fee with either per unit or ad valorem royalties. We de...