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

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

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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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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