Private and Public Approaches to Patent Holdup in Industry Standard-Setting
40 Pages Posted: 2 Jan 2012
Date Written: December 8, 2011
Many standard setting organizations (SSOs) promote coordinated industry-wide investments in technologies that may be patented. If these investments are sunk before implementers become aware of the patents, or obtain some assurance of a reasonably priced license, the patentee will have a very strong bargaining position. The resulting holdup problem may lead to higher prices and reluctance to implement new standards. This article describes steps that many SSOs take (or might take) to mitigate patent holdup, and discusses public policies that can strengthen or weaken the private initiatives of SSOs to deal with the problem of potential holdup.
Keywords: Standards, patents, intellectual property, FRAND, licensing, holdup
JEL Classification: L15, O34, D71, D72
Suggested Citation: Suggested Citation