PROGRESS IN THE AIRCRAFT INDUSTRY AND THE ROLE OF PATENT POOLS AND CROSS-LICENSING AGREEMENTS

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This paper explores the challenges that widely dispersed property rights—a so-called “tragedy of the anticommons”—has presented to the aircraft industry in the past and suggests that patent pools and cross-licensing agreements are appropriate private mechanisms the industry can use to resolve such challenges in the future. The Manufacturers Aircraft Association (“MAA”), a patent pool formed among aircraft manufacturers at the insistence of the Secretary of War prior to World War I, provides both the historical foundation for aircraft patent pools and a baseline model for the resolution of future obstacles facing the aircraft industry. This paper suggests that a properly structured modern-day aircraft patent pool should incorporate many of the features of the Manufacturers Aircraft Association—including open availability to all industry firms and a unanimously approved royalty-rate structure—in order to provide the broadest and most cost-efficient access to valuable aircraft patents while simultaneously encouraging the member firms to compete in the marketplace.

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