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

Abstract

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.

Is Co-Invention Expediting Technological Catch Up? A Study of Collaboration between Emerging Country Firms and EU Inventors

“…This is a good proxy for the commercial value of the patent because the patenting company has to pay additional fees for each country in which it is registered (Bekkers et al, 2011).…”

Just-in-Time Inventions and the Development of Standards: How Firms Use Opportunistic Strategies to Obtain Standard-Essential Patents (SEPs)

“…By being part of such alliances and consortia, firms increase their chances of having their own (patented) technical contributions accepted in the standard. Bekkers et al (2011) studied the determinants of patents being (claimed) essential. They found that patents with a high value ('technical merit') have an increased likelihood of becoming (claimed) essential, but the patent owner being an active participant was a much better determinant.…”

“…Note that our set of selected patents does not include patents with a priority date older than 1999, the year in which the first of our 77 studied standardization meetings took place. This is important because earlier papers have observed that claimed essential patents preceding the standardization effort often have a much higher citation score, being selected for their technological contribution, even though they are 'old' (Bekkers et al, 2011). Excluding this group prevents unwanted bias in this respect.…”

Mobile telecommunication standardization in Japan, China, the United States, and Europe: a comparison of regulatory and industrial regimes

“…Another important technology in the IMT-2000 family of technologies is TD-SCDMA, which is a standard developed in China. W-CDMA was most successful [53].…”