Counting Standard Contributions to Measure the Value of Patent Portfolios - A Tale of Apples and Oranges

Abstract

Measuring the value of portfolios of Standard-Essential Patents (SEP) is a difficult and controversial exercise. It has recently been suggested to use counts of technical contributions to Standard Development Organizations (SDO) as an indicator of the share of the value of a standard created by an SEP holder. Analyzing a comprehensive database of contributions to the Third Generation Partnership Project (3GPP), I find that contributions are highly heterogeneous in technical significance, outcome, and impact. The standardization process is not intended to screen contributions for value or significance. Against this background, contribution counts are not a suitable basis for apportioning the value of a standard between different SEP holders. The measure is prone to be easily manipulated. Furthermore, apportioning royalty payments by contribution counts would exacerbate commercial considerations and opportunistic strategies, which could hamper or even derail the technical work of SDO working groups.

Keywords: Standard Development Organizations, Patent Valuation, Standard-Essential Patents

JEL Classification: O32, O34