Patent Licensing in Models of Spatial Competition: A Literature Review

We survey the main theoretical contributions on patent licensing in spatial models of competition. Building on both the shopping models à la Hotelling and the shipping models of spatial discrimination, our analysis focuses on how the spatial dimension of competition drives the choice of the optimal licensing contract by an innovating firm. The work also sheds light on some features determining the optimal technology transfer method in a spatial context, which allows us to better position patent licensing in the debate on technology transfer.