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Competing on Standards? Entrepreneurship, Intellectual Property and the Platform Paradox

  • Timothy S. Simcoe
  • Stuart J.H. Graham
  • Maryann Feldman

This paper studies the intellectual property strategy of firms that participate in the formal standards process. Specifically, we examine litigation rates in a sample of patents disclosed to thirteen voluntary Standard Setting Organizations (SSOs). We find that SSO patents have a relatively high litigation rate, and that SSO patents assigned to small firms are litigated more often than those of large publicly-traded firms. We also estimate a series of difference-in-differences models and find that small-firm litigation rates increase following a patent's disclosure to an SSO while those of large firms remain unchanged or decline. We interpret this result as evidence of a "platform paradox" -- while small entrepreneurial firms rely on open standards to lower the fixed cost of innovation, these firms are also more likely to pursue an aggressive IP strategy that may undermine the openness of a new standard.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13632.

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Date of creation: Nov 2007
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Publication status: published as Competing on Standards? Entrepreneurship, Intellectual Property and Platform Technologies , Timothy S. Simcoe, Stuart J.H. Graham, Maryann P. Feldman. in Entrepreneurship: Strategy and Structure , Hellmann and Stern. 2009
Handle: RePEc:nbr:nberwo:13632
Note: IO PR
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  15. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August.
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  17. Marc Rysman & Tim Simcoe, 2006. "Patents and Performance of Voluntary Standard Setting Organizations," Boston University - Department of Economics - Working Papers Series WP2006-031, Boston University - Department of Economics.
  18. Dietmar Harhoff & Francis Narin & F. M. Scherer & Katrin Vopel, 1999. "Citation Frequency And The Value Of Patented Inventions," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 511-515, August.
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