Stefano Comino

Dual Licensing in Open Source Software Markets

In this paper we present a theoretical model to study the characteristics and the commercial sustainability of a particular open source (OS) strategy known as dual licensing, the practice of distributing a software both under a commercial and an OS license. We show that the decision to employ a dual licensing strategy occurs whenever the strength and the relevance of the contribution of the OS community are sufficiently large, while it does not depend upon customers’ preferences towards license restrictiveness. The profitability of dual licensing crucially depends on the proper setting of the licensing terms of the OS distribution, which represents the key versioning tool; this analysis suggests a possible explanation for the observed proliferation of open source licenses. J.E.L. codes: L11, L17, L86, D45.

Updates Management in Mobile Applications. iTunes vs Google Play

This paper focuses on a specific strategy that developers of mobile applications may use to stimulate demand: the release of updates. We start with a stylised theoretical analysis to describe the developers decision to release an update. Its predictions are then tested by using an unbalanced panel with the top 1,000 apps in iTunes and Google Play for five European countries. We show that while in iTunes updates increase the rate of growth of downloads, in Google Play their effect is not significant. We argue that the lack of quality control by Google Play can lead to an excess of updating. We also find that the past performance of the app influences the decision to release an update, but only in iTunes. This finding is in line with our theoretical analysis and can again be interpreted on the basis of the different way of governing the release of updates in the two stores.

Ex-ante licensing in sequential innovations

The theoretical literature on the cumulative innovation process has emphasized the role of ex-ante licensing – namely, licensing agreements negotiated before the follow-on innovator has sunk its R&D investment – in mitigating the risk of hold-up of future innovations. In this paper, we consider a patent-holder and a follow-on innovator bargaining over the licensing terms in a context where the former firm is unable to observe the timing of the R&D investment of the latter. We show that the possibilities of restoring the R&D incentives by setting the licensing terms appropriately are severely limited.

Intellectual Property and Innovation in Information and Communication Technology (ICT)

The aim of this study is to provide a structured review of the role of IPR in fostering innovation and economic growth in the European ICT sector. Typically IPR analysis of industries focuses on patents. In practice, however, IPR strategies are developed combining the use of different IP rights. The scope of analysis considers this and looks at the joint use of patents, trademarks and industrial designs, each protecting a different type of knowledge-based asset. Based on these characteristics, the focus of the research is to provide an overview of the mechanisms typically employed in order to appropriate the returns from R&D investments. For each formal IPR, we briefly review the main contributions to the economic literature, both theoretical and empirical, on the rationale for its existence and the effects it generates on firms’ behaviour and market outcomes. We then highlight the most important emerging issues. In the final section of the study, we focus on the software industry.

THE ROLE OF PATENTS IN INFORMATION AND COMMUNICATION TECHNOLOGIES: A SURVEY OF THE LITERATURE: PATENTS IN INFORMATION AND COMMUNICATION TECHNOLOGIES

During the last decades, the number of ICT related patents has increased considerably. In association with a great fragmentation in IP rights, the increasing number of patents has generated a series of potentially problematic consequences. Patent thickets, royalty stacking, the emergence of patent assertion entities, increased patent litigation – in particular around standard essential patents – and the difficulties in the definition of fair, reasonable and non-discriminatory (FRAND) licensing terms are among the most debated issues in the literature that we review in this paper. We devote a specific section of our survey to patents involving software products, where the above problems are amplified by the high level of abstraction of computer algorithms. In our analysis we mix theoretical and empirical arguments with a more policy-oriented reasoning. This allows us to better position the different issues in the relevant political and economic context.

To upgrade or not to upgrade? the release of new versions to survive in the hypercompetitive app market

Very low entry barriers and an exceptionally high degree of competition characterize the market for mobile applications. In such an environment one of the critical issues is how to at- tract the attention of users. Practitioners and developers are well aware that managing app updates (i.e., releasing new versions of an existing app) is critical to increase app visibil- ity and to keep users engaged, disguising a hidden strategy to stimulate downloads. We use unbalanced panel data with characteristics for the top 1,000 apps on iTunes and Google Play stores, for five European countries, to empirically in- vestigate publishers’ strategies concerning the release of up- dates. We find that only in the case of iTunes updates boost downloads and are more likely to be released when the app is experiencing poor performance. We interpret this finding as evidence that the lack of quality control by Google Play leads to an excess of updating of Android apps.