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Standard Setting Organisations and Standard Essential Patents: Voting and Markets

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  • Daniel F Spulber

Abstract

The analysis provides conditions under which standard setting organisations (SSOs) choose efficient technology standards. I introduce a two-stage game with both voting and market competition. In equilibrium, standards and market outcomes are efficient even with market power from scarce capacity and standard essential patents (SEPs). I show that a drastic innovation with SEPs generates greater social welfare than a less efficient standard without SEPs. A key finding is that voting power and market power have counterbalancing effects. The discussion helps explain empirical observation of differences in SSO voting rules, intellectual property (IP) rules, membership and alliances.

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  • Daniel F Spulber, 2019. "Standard Setting Organisations and Standard Essential Patents: Voting and Markets," The Economic Journal, Royal Economic Society, vol. 129(619), pages 1477-1509.
    • Handle: RePEc:oup:econjl:v:129:y:2019:i:619:p:1477-1509.
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    References listed on IDEAS

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    Cited by:

    1. Antonin Bergeaud & Julia Schmidt & Riccardo Zago, 2022. "Patents that match your standards: firm-level evidence on competition and innovation," POID Working Papers 040, Centre for Economic Performance, LSE.
    2. Jiaming Jiang & Rajeev K. Goel & Xingyuan Zhang, 2020. "IPR policies and determinants of membership in Standard Setting Organizations: a social network analysis," Netnomics, Springer, vol. 21(1), pages 129-154, December.
    3. Gamarra, Yanis & Friedl, Gunther, 2022. "Firms' Involvement in Standardization and Average Total Costs per Patent Family," 31st European Regional ITS Conference, Gothenburg 2022: Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes 265630, International Telecommunications Society (ITS).
    4. Schmidt, Julia & Steingress, Walter, 2022. "No double standards: Quantifying the impact of standard harmonization on trade," Journal of International Economics, Elsevier, vol. 137(C).
    5. Lorenz Brachtendorf & Fabian Gaessler & Dietmar Harhoff, 2023. "Truly standard‐essential patents? A semantics‐based analysis," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 32(1), pages 132-157, January.
    6. Brachtendorf, Lorenz & Gaessler, Fabian & Harhoff, Dietmar, 2020. "Truly Standard-Essential Patents? A Semantics-Based Analysis," Rationality and Competition Discussion Paper Series 265, CRC TRR 190 Rationality and Competition.
    7. Fu, Xiao & Tan, Guofu & Wang, Jin, 2023. "Policy orientations and technology choices in standards wars," International Journal of Industrial Organization, Elsevier, vol. 88(C).
    8. Bergeaud Antonin & Schmidt Julia & Zago Riccardo, 2022. "Patents that Match your Standards: Firm-level Evidence on Competition and Growth," Working papers 876, Banque de France.
    9. Baron, Justus & Kanevskaia, Olia, 2023. "Wearing multiple hats—The role of working group chairs’ affiliation in standards development," Research Policy, Elsevier, vol. 52(9).

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