Competing on Standards? Entrepreneurship, Intellectual Property and Platform Technologies

Posted: 8 Jul 2009

See all articles by Timothy Simcoe

Timothy Simcoe

Boston University - Questrom School of Business; NBER

Stuart J.H. Graham

Georgia Institute of Technology - Scheller College of Business

Maryann P. Feldman

University of North Carolina at Chapel Hill; University of North Carolina (UNC) at Chapel Hill - Department of Public Policy; Kenan Flagler Business School

Date Written: April 28, 2009

Abstract

Entrepreneurs often rely on intellectual property (IP) to earn a return on their innovations, and also compatibility standards, which allow them to supply specialized components for a shared technology platform. This paper compares the IP strategies of small entrepreneurs and large incumbents that disclose patents at thirteen voluntary Standard Setting Organizations (SSOs). These patents have a relatively high litigation rate. For small private firms, the probability of filing a lawsuit increases after disclosure to the SSO. For large public firms, the filing rate is unchanged. While forward citations increase after disclosure for all firms, the size of this effect is the same for entrepreneurs and incumbents. These results suggest that standards increase the difference between large and small firms’ incentives to litigate, rather than the relative value of their patents. We conclude that because specialized technology providers cannot seek rents in complementary markets, they defend IP more aggressively once it has been incorporated into an open platform.

Keywords: Compatibility, Standards, Patents, Litigation, Platform

JEL Classification: D45, K41, O32, O34

Suggested Citation

Simcoe, Timothy S. and Graham, Stuart J.H. and Feldman, Maryann P., Competing on Standards? Entrepreneurship, Intellectual Property and Platform Technologies (April 28, 2009). Available at SSRN: https://ssrn.com/abstract=1396318

Timothy S. Simcoe (Contact Author)

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Stuart J.H. Graham

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St. NW
Atlanta, GA 30308
United States
404-385-0953 (Phone)
404-894-6030 (Fax)

HOME PAGE: http://https://www.scheller.gatech.edu/graham

Maryann P. Feldman

University of North Carolina at Chapel Hill ( email )

CB 3435
University of North Carolina
Chapel Hill, NC 27599-3140
United States

HOME PAGE: http://maryannfeldman.web.unc.edu/

University of North Carolina (UNC) at Chapel Hill - Department of Public Policy ( email )

Abernathy Hall
Chapel Hill, NC 27599-3435
United States

Kenan Flagler Business School ( email )

Chapel Hill, NC
United States

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