Abstract:

In recent decades， with the in-depth development of technological progress and economic globalization， intellectual property has become the driving force for the development of various countries. Strengthening intellectual property protection helps to promote sustainable and healthy economic and social development， and patent licensing is the key to intellectual property protection. However， unreasonable licensing strategies can also lead to patent infringement disputes. Moreover， in the process of enterprise operation， it is often necessary to face the market competition of competitors， which further increases the complexity of the enterprise decision-making process. In this context， the following three questions are studied： a） How should foreign company choose the optimal patent licensing strategy？ b） What impact do different patent licensing strategies have on the production decisions and profits of domestic companies？ c） How does market encroachment affect the equilibrium of the system？In this paper， considering a monopolistic market composed of foreign company and two competing domestic companies， the optimal patent licensing and production strategies in the presence of market encroachment are investigated. Two three-stage dynamic game model are established under different patent licensing strategies， respectively. The main work includes three parts. At first， optimal licensing strategies are proposed and the optimal production decision is analyzed through solving the model， respectively. Second， the optimal patent licensing strategy choices of foreign company and the impact of different patent licensing strategies on the system equilibrium are analyzed. And to address the value of licensing strategies， the difference in profit share of companies under different types of licensing strategies is compared. Third， the effects of market encroachment on system equilibrium are investigated.The results show that， in the transnational technology licensing cooperation， differentiated royalties strategy is the best choice for foreign company， that is， to strategically choose different royalties for competitive domestic companies. At this time， foreign companies can occupy a higher profit share than domestic companies. This conclusion is one of the main innovations of this paper， which verifies the practice of multinational patent licensing in reality. Moreover， the impact of market encroachment on the optimal decision-making of foreign company， and domestic companies depends on the degree of market competition， and the impact on the profits of foreign company and domestic companies is also affected by patent licensing strategies. In addition， consumers have more product purchasing choices under the market encroachment， which is conducive to improving consumer welfare. Finally， from the perspective of cross-border competition and cooperation， since foreign enterprises can obtain positive externalities from the market competition of domestic enterprises， foreign enterprises should also grant patents to as many domestic enterprises as possible， and obtain excess returns by intensifying domestic market competition.In summary， under the trend of economic globalization， a reasonable and effective transnational licensing mechanism is crucial. The theoretical analysis results obtained in this paper can provide a theoretical basis and reference for the practice of transnational patent licensing.

Key words: patent licensing, market encroachment, royalty fee, quantity competition