期末報告題目

Problem 3 (Team 5)
Presentation: 1/3/2007

Basic facts:

Company A develops and owns an advanced database software system (“Database”). Many software applications can be implemented that take advantage of the powerful features and functionalities of the Database. The Database occupies 90% of the database market in the U.S. Although Company A has some research and development activities in coming up with applications that make use of the Database, such as mobile electronic mail, it has not devoted much of its resources to commercialize these applications. However, Company A has diligently protected the Database and the applications of the Database through the use of copyright, patents, and trade secrets globally.

Recently, the growth of the database market in the U.S. has stalled, but the mobile electronic mail software market is expected to grow rapidly. There are three companies, X, Y, and Z, that specialize in this market. X, Y, and Z independently develop certain mobile email software products (“MobileMail”) that work with different databases. However, when MobileMail uses the new features of the latest version of the Database, version 6.0, MobileMail achieves its optimal performance and offers the most features. MobileMail has two components: a client component that operates on the mobile devices and a server component that operates on the servers of the mobile communication service providers (e.g., Verizon Wireless). Out of the three companies, X has the most customers and Z has the least. X, Y, and Z have diligently protected their products through the use of trademark, copyright, patents, and trade secrets globally.

For purposes of this problem, please assume the following:

a) Most of the customers of the Database already have version 5.0 of the Database in the U.S. but not version 6.0. These customers have needs for the services that are offered by MobileMail but are generally not familiar with X, Y, and Z.
b) X, Y, and Z have their own brands.
c) In order to encourage their existing customers to upgrade and new customers to use Database 6.0, Company A has decided to work with X, Y, and Z through some licensing schemes.
d) Company A distributes the Database through value-added retailers. The server component of MobileMail can be easily tailored by the in-house engineers of the companies that purchase MobileMail.
e) A set of Database is at least 10 to 20 times more expensive than the MobileMail. X, Y, and Z charge approximately the same for their MobileMail products.
f) Please do not focus your efforts on anti-trust analyses.

Q1: What licensing models should Company A use to grow its revenue? Explain the benefits and shortfalls of each model. Which one of these models do you think will achieve win-win for the parties in the licensing arrangement? Why?

Q2: What agreements are needed and how should they be structured to accomplish the win-win scenario? Please do not focus your efforts on preparing specific contract language. Instead, please focus your efforts on explaining
1) what agreements are needed,
2) what provisions should be in the agreements and why, and
3) how all the agreements relate to one another.