Exit, Voice and Loyalty: Strategic Behavior in Standards Development Organizations

61 Pages Posted: 27 Nov 2019 Last revised: 2 Dec 2019

See all articles by Panos Delimatsis

Panos Delimatsis

Tilburg Law and Economics Center (TILEC); Tilburg Law School

Olia Kanevskaia Whitaker

Centre for IT & IP Law (CiTiP) KU Leuven ; Tilburg Law and Economics Center (TILEC)

Zuno Verghese

Tilburg Law and Economics Center (TILEC), LTMS, Tilburg Law School, Tilburg University

Date Written: November 15, 2019

Abstract

The protection of intellectual property rights and its limits has spurred controversy in the standardization ecosystem in recent times. While conflicting interests in standard-setting abound over a wide range of pertinent aspects, considerations regarding the inclusion and subsequent treatment of proprietary elements in a technical standard hold the lion’s share of concerns that Standards Development Organizations (SDOs) have to deal with. These concerns revolve around the balance between the interests of innovators and implementers of new technologies. In this respect, SDOs adopt patent policies, which members have to observe in order to participate in SDOs’ activities. Similarly to other rules governing the work of SDOs, patent policies may be modified following the prescribed procedures. However, any subsequent changes to an organization’s operational framework, including its intellectual property rules, may distort prior expectations and lock in members to rules that they never intended to abide by. Against this backdrop, this Article seeks to explore how SDOs’ members respond to the amendments of intellectual property rules by offering a taxonomy of strategies that may be adopted by members opposing modifications based on the exit and voice theory by Hirschman (1970). Drawing upon the example of the Institute of Electrical and Electronics Engineers (IEEE) revised Patent Policy, which took effect in 2015, the Article explores how SDO members respond to instances of organizational distress such as an update of intellectual property policies within an SDO, using as proxies stakeholders’ willingness to commit to the new licensing rules and previous examples of strategies when misunderstandings around intellectual property arose. At a normative level, this Article further studies the effect that such changes may have on the nature and structure of a given industry and offers a novel classification of reactions to turning points in the standards development realm, thereby contributing to the currently underdeveloped body of literature on strategic behavior in technological standardization.

Keywords: standards development organizations (SDOs)); patent policy; strategic behavior; technical standards; organizational distress; intellectual property rights; exit and voice strategies

JEL Classification: D23, K21, K22, L14, L15, L22, O32, O34

Suggested Citation

Delimatsis, Panagiotis and Kanevskaia Whitaker, Olia and Verghese, Zuno George, Exit, Voice and Loyalty: Strategic Behavior in Standards Development Organizations (November 15, 2019). TILEC Discussion Paper No. DP 2019-022, Available at SSRN: https://ssrn.com/abstract=3487466 or http://dx.doi.org/10.2139/ssrn.3487466

Panagiotis Delimatsis (Contact Author)

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Postbus 90153
Tilburg, NL-5000 LE
Netherlands
0031 13 466 8251 (Phone)
0031 13 466 8047 (Fax)

HOME PAGE: http://www.tilburguniversity.edu/staff/p-delimatsis

Tilburg Law School ( email )

Warandelaan 2
Postbus 90153
Tilburg, 5000 LE
Netherlands

Olia Kanevskaia Whitaker

Centre for IT & IP Law (CiTiP) KU Leuven ( email )

Sint-Michielsstraat 6 box 3443
Leuven, 3000
Belgium
2517AC (Fax)

Tilburg Law and Economics Center (TILEC) ( email )

Tilburg
Netherlands

Zuno George Verghese

Tilburg Law and Economics Center (TILEC), LTMS, Tilburg Law School, Tilburg University ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://research.tilburguniversity.edu/en/persons/zuno-verghese

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
71
Abstract Views
513
rank
377,264
PlumX Metrics