This chapter, titled "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," by Carl Shapiro, explores the challenges posed by overlapping patent rights in key industries such as semiconductors, biotechnology, computer software, and the Internet. The author argues that the patent system, while fostering innovation, creates a "patent thicket" that can stifle commercialization due to the need to obtain licenses from multiple patent holders. This issue is particularly acute when combined with the risk of holdup, where new products inadvertently infringe on patents issued after their design. The chapter discusses two primary methods for navigating the patent thicket: cross licenses and patent pools. Cross licenses allow companies to license each other's patents without charge, enhancing design freedom and fostering innovation. Patent pools, on the other hand, involve a single entity licensing multiple patents as a package to third parties, simplifying the licensing process and reducing transaction costs. The author also examines the role of standard setting in addressing the complements problem, where multiple patents are essential to a product or service. Standard-setting organizations often require participants to license essential patents on fair, reasonable, and non-discriminatory terms to prevent holdup and promote innovation. Antitrust law and enforcement can complicate these solutions, as they historically have been hostile to cooperation among horizontal rivals. However, the chapter suggests that antitrust policies can be adjusted to support cooperative activities, such as cross licenses and patent pools, while ensuring they do not harm competition. The chapter concludes by discussing specific cases and legal challenges related to cross licenses and patent pools, highlighting the complex interplay between private business practices and antitrust regulations.This chapter, titled "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," by Carl Shapiro, explores the challenges posed by overlapping patent rights in key industries such as semiconductors, biotechnology, computer software, and the Internet. The author argues that the patent system, while fostering innovation, creates a "patent thicket" that can stifle commercialization due to the need to obtain licenses from multiple patent holders. This issue is particularly acute when combined with the risk of holdup, where new products inadvertently infringe on patents issued after their design. The chapter discusses two primary methods for navigating the patent thicket: cross licenses and patent pools. Cross licenses allow companies to license each other's patents without charge, enhancing design freedom and fostering innovation. Patent pools, on the other hand, involve a single entity licensing multiple patents as a package to third parties, simplifying the licensing process and reducing transaction costs. The author also examines the role of standard setting in addressing the complements problem, where multiple patents are essential to a product or service. Standard-setting organizations often require participants to license essential patents on fair, reasonable, and non-discriminatory terms to prevent holdup and promote innovation. Antitrust law and enforcement can complicate these solutions, as they historically have been hostile to cooperation among horizontal rivals. However, the chapter suggests that antitrust policies can be adjusted to support cooperative activities, such as cross licenses and patent pools, while ensuring they do not harm competition. The chapter concludes by discussing specific cases and legal challenges related to cross licenses and patent pools, highlighting the complex interplay between private business practices and antitrust regulations.