In light of the increased demand for interoperability, fragmented ownership of intellectual property and high costs for communicating new technologies, open standard-setting activities emerged as an important coordination and diffusion mechanism. Little is known about the value of contributions to standard setting organizations (SSOs) for technology providers. This paper provides a large-scale empirical assessment of the value of disclosures to SSOs for technology sponsors. Our findings show that disclosures referring explicitly to patents are evaluated positively by the market while this is not the case for blanket disclosures. This indicates that the expected benefits of participating in SSOs outweigh potential disadvantages from making patented technologies available to the market under SSO licensing conditions. The market does not appreciate disclosures to SSOs if there is uncertainty about the associated technologies.
In light of the increased demand for interoperability, fragmented ownership of intellectual property and high costs for communicating new technologies, open standard-setting activities emerged as an important coordination and diffusion mechanism. Little is known about the value of contributions to standard setting organizations (SSOs) for technology providers. This paper provides a large-scale empirical assessment of the value of disclosures to SSOs for technology sponsors. Our findings show that disclosures referring explicitly to patents are evaluated positively by the market while this is not the case for blanket disclosures. This indicates that the expected benefits of participating in SSOs outweigh potential disadvantages from making patented technologies available to the market under SSO licensing conditions. The market does not appreciate disclosures to SSOs if there is uncertainty about the associated technologies.
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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:http://ftp.zew.de/pub/zew-docs/dp/dp12015.pdf Non-Technical SummaryPatents are frequently viewed as major policy tool in order to stimulate R&D. In recent years however, doubts emerged whether this is the case for all technology areas. Theoretical research has shown that when research is sequential and cumulative, stronger patents may in fact discourage follow-on inventions. So called patent thickets are accused to stifle the commercialization of technology in innovations. These thickets refer to a multitude of overlapping patent rights that an innovating firm requires access to.Recent empirical research provides evidence that firms facing patent thickets have lower innovation performance. By which mechanism patent thickets affect innovation activities remains, however, unclear. Two mechanisms could cause such a negative impact: royality stacking and hold-up threats. Using survey data of the Mannheim Innovation Panel for German manufacturing firms and balance sheet data from Creditreform's Dafne database, I investigate whether investments in innovations are affected by proxies for the pervasiveness of royality stacking and hold-up threats. The former is empirically characterized in terms of fragmented ownership of patent rights. The latter is characterized by differences in fixed tangible assets between the downstream innovating firm and upstream owners of relevant patents. This measure proxies for the maximum amount of accumulated sunk investments that holding-up patent owners could expropriate.I find that both measures, ownership fragmentation and differences in non-current, tangibles assets, affect investments in innovation negatively. Ownership fragmentation reduces innovative investments for firms with small patent portfolios. Capital stock differences reduce investments in innovation for firms with large patent portfolios. Differences in fixed capital reduce investments in innovation irrespective whether they refer to blocking or non-blocking patent owners and irrespective to size characteristics of the cited patent owners.These effects are specific to investments in innovation. There are no comparable effects on investments in R&D or residual physical investments. This evidence suggests that negative effects of patent thickets on innovation are not uniform and depend on characteristics of the innovating firm. Das Wichtigste in Kürze
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