The purpose of or paper is to study licensing policies for the owner of a product innovation in a spatial model. We compare patent holder’s profits when fees are used to extract licensees’ rents both in the cases of noncompetitive ( the licence includes en exclusive territory clause) and...

We analyze a multi-stage non-cooperative game involving an outside patent-holder, who seeks to licence a process innovation, and two price-setting firms located on a circumference. Three licensing policies are studied: the auction, the fixed fee and the per unit output royalty. The main finding...