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An empirical study on the determinants of essential patent claims in compatibility standards

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  • Bekkers, Rudi
  • Bongard, René
  • Nuvolari, Alessandro

Abstract

In the field of compatibility standards, an increasing number of companies claim to own so-called essential patents (i.e. those patents that are indispensable for designing and manufacturing products conforming to the standard). It is widely believed that the ownership of such patents is a very valuable bargaining tool in cross-license negotiations, while for non-producing firms such patents may result in a substantial stream of licensing revenues. In this paper we study the determinants of essential patent claims in compatibility standards. In particular, we assess the role of two main factors: the significance of the technological solution contained in the patent and the involvement of the applicant of the patent in the standardisation process. We examine the case of W-CDMA, one of the most successful standards in mobile telecommunications. We compare the patents claimed essential for this standard with a control group of randomly selected, unclaimed patents covering the same time period and technology classes. We find empirical evidence that both factors have significant impact on the probability that a patent is claimed as essential, but the involvement in the standardisation process is a stronger determinant than the technical value ('merit') of the patent. On the basis of our findings, we offer policy recommendations.

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Bibliographic Info

Article provided by Elsevier in its journal Research Policy.

Volume (Year): 40 (2011)
Issue (Month): 7 (September)
Pages: 1001-1015

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Handle: RePEc:eee:respol:v:40:y:2011:i:7:p:1001-1015

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Web page: http://www.elsevier.com/locate/respol

Related research

Keywords: Essential patents Compatibility standards IPR policies Mobile telecommunications W-CDMA Economics of information systems;

References

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  1. Nicolas van Zeebroeck, 2011. "The Puzzle of Patent Value Indicators," ULB Institutional Repository 2013/60729, ULB -- Universite Libre de Bruxelles.
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  7. Bekkers, Rudi & Duysters, Geert & Verspagen, Bart, 2002. "Intellectual property rights, strategic technology agreements and market structure: The case of GSM," Research Policy, Elsevier, vol. 31(7), pages 1141-1161, September.
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Citations

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Cited by:
  1. Henry Delcamp & Aija Leiponen, 2012. "Innovating Standards through Informal Consortia: The Case of Wireless Telecommunications," NBER Chapters, in: Standards, Patents and Innovations National Bureau of Economic Research, Inc.
  2. Byeongwoo Kang & Rudi Bekkers, 2013. "Just-in-time inventions and the development of standards: How firms use opportunistic strategies to obtain standard-essential patents (SEPs)," Eindhoven Center for Innovation Studies (ECIS) working paper series 13-01, Eindhoven Center for Innovation Studies (ECIS), revised Feb 2013.
  3. Byeongwoo KANG & MOTOHASHI Kazuyuki, 2012. "Determinants of Essential Intellectual Property Rights for Wireless Communications Standards: Manufacturing firms vs. non-manufacturing patentees," Discussion papers 12042, Research Institute of Economy, Trade and Industry (RIETI).
  4. Nambisan, Satish, 2013. "Industry technical committees, technological distance, and innovation performance," Research Policy, Elsevier, vol. 42(4), pages 928-940.
  5. Christian Le Bas & Julien Pénin, 2014. "Patents and innovation : Are the brakes broken, or how to restore patents’ dynamic efficiency ?," Working Papers of BETA 2014-02, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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