Setting Standards: Strategic Advantages in International Trade

Abstract

Among the most important technical barriers to trade are the different standards, testing and certification measures for products and services. Efforts to co‐ordinate these within Europe ‐ including the EU’s increasing reliance on private sector standards bodies ‐ are now underway. The EU’s single market has not only integrated national markets, but has also shaped trading principles at the international level. The EU has exported its trade principles to third country markets and European companies have gained strategic advantages in influencing standards both internally within Europe and externally at the international and transatlantic level. Firms should invest resources and actively participate in setting standards to protect and increase their competitive advantage.

Technology standards-setting in the US wireless telecommunications industry: A study of three generations of digital standards development

“…More recently, American companies have turned to alternative institutional mechanisms of coordination -150 informal standards-setting bodies and groups that negotiate over product specifications (Egan, 2002). The US leads the world in established industrial standards with 85,000, with Germany trailing behind with 37,000 standards (Toth, 2001).…”

A “New Approach” to Standards and Consumer Protection

“…Use of standards may have costs, too: reduced product variety, increased risk of being locked-in to a particular solution to a problem, and a possible one-time increase in production costs if existing production systems must be reengineered to accommodate a later standard (Egan 2002).…”

Technology standards development, patent ambush, and US antitrust policy

“…Furthermore, Infineon withdrew its monopolization claims, and the court granted Rambus's motion for judgement as a matter of law on Infineon's attempted monopolization claim because Infineon failed to submit evidence relating to the scope of the relevant geographic market. 6 The jury found for actual and constructive fraud; however, the district court found only for constructive fraud. 7 On appeal, the Federal Circuit Court reversed the trial court's decision regarding constructive fraud and ruled in favor of Infineon, and the original jury verdict finding of fraud in the SDRAM standard-development activity was allowed to stand [23].…”

“…7 On appeal, the Federal Circuit Court reversed the trial court's decision regarding constructive fraud and ruled in favor of Infineon, and the original jury verdict finding of fraud in the SDRAM standard-development activity was allowed to stand [23]. 8 In its holding, the court criticized JEDEC's patent operating policy and procedures for its 'staggering lack of details', thereby leaving standard development participants with 'vaguely defined expectations as to what they believe the policy requires' in the way of 6 Infineon's counterclaim identified the United States as a relevant geographic market given Rambus's US patents, but the Fourth Circuit Court requires a party asserting a Section 2 antitrust claim to offer proof of a geographic market [23]. 7 The jury awarded Infineon $1 in nominal damages and $3.5 million in punitive damages, which the court reduced to $350,000 [23].…”