This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research. The volume is titled "Innovation Policy and the Economy, Volume 1," edited by Adam B. Jaffe, Josh Lerner, and Scott Stern, published by MIT Press. The chapter titled "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting" by Carl Shapiro discusses the challenges of navigating a patent thicket, which is a dense web of overlapping patents that can hinder the commercialization of new technologies. The chapter highlights the issues of holdup, where new products may inadvertently infringe on patents issued after their design. It explores how cross licenses and patent pools can help navigate these challenges, but also notes that antitrust laws may add to transaction costs. The chapter argues that certain principles, such as licensing complementary patents but not substitute patents, can help antitrust laws support rather than hinder the resolution of patent thicket and holdup issues. It also discusses the economic theory of complements, the holdup problem, and the role of business strategies like cross licenses and patent pools in solving these issues. The chapter concludes that while the patent system can slow innovation, private companies can navigate the system through coordination and that antitrust laws should be sensitive to these transaction costs.This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research. The volume is titled "Innovation Policy and the Economy, Volume 1," edited by Adam B. Jaffe, Josh Lerner, and Scott Stern, published by MIT Press. The chapter titled "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting" by Carl Shapiro discusses the challenges of navigating a patent thicket, which is a dense web of overlapping patents that can hinder the commercialization of new technologies. The chapter highlights the issues of holdup, where new products may inadvertently infringe on patents issued after their design. It explores how cross licenses and patent pools can help navigate these challenges, but also notes that antitrust laws may add to transaction costs. The chapter argues that certain principles, such as licensing complementary patents but not substitute patents, can help antitrust laws support rather than hinder the resolution of patent thicket and holdup issues. It also discusses the economic theory of complements, the holdup problem, and the role of business strategies like cross licenses and patent pools in solving these issues. The chapter concludes that while the patent system can slow innovation, private companies can navigate the system through coordination and that antitrust laws should be sensitive to these transaction costs.