Abstract
A major policy issue in standard setting is that patents that are ex-ante not that important may, by being included into a standard, become standard-essential patents (SEPs). In an attempt to curb the monopoly power that they create, most standard-setting organizations require the owners of patents covered by the standard to make a loose commitment to grant licenses on reasonable terms. Such commitments unsurprisingly are conducive to intense litigation activity. This paper builds a framework for the analysis of SEPs, identifies several types of ine¢ ciencies attached to the lack of price commitment, shows how structured price commitments restore competition, and analyzes whether price commitments are likely to emerge in the marketplace.
Keywords
Standards; licensing commitments; standard-essential patents; royalty stacking; FRAND; hold ups and reverse hold ups;
JEL codes
- D43: Oligopoly and Other Forms of Market Imperfection
- L24: Contracting Out • Joint Ventures • Technology Licensing
- L41: Monopolization • Horizontal Anticompetitive Practices
- O34: Intellectual Property and Intellectual Capital
Replaced by
Josh Lerner, and Jean Tirole, “Standard-Essential Patents”, Journal of Political Economy, vol. 123, n. 3, June 2015, pp. 547–586.
Reference
Josh Lerner, and Jean Tirole, “Standard-Essential Patents”, TSE Working Paper, n. 13-441, November 5, 2013, revised March 13, 2014.
See also
Published in
TSE Working Paper, n. 13-441, November 5, 2013, revised March 13, 2014