Patent pool and dominant design: An empirical study of patent pool from MPEG-LA

A patent pool is a marketing alliance that licenses technology to manufacturers. We build on previous research on patent pools that have mainly focused on transaction cost theory to explore the impact of patent pools on innovation. Our results show that the pool's influence on the dominant design depends on the technical characteristics of both the patent pool and the licensor. We found an inverted U-shaped relationship between the age of the patent pool and the dominant design. The difficulty of technology development and the number of licensors in the pool actively moderate the relationship between the age of the patent pool and the dominant design. Our research also found that when licensors are vertically integrated, the dominant patent pool design increases as the pool grows.