Does Patent Monetization Promote SSO Participation?

Abstract

We study the impact of Standard Setting Organization (SSO) intellectual property rights (IPR) policies on standardization and innovation. Specifically, we conduct a pair of event studies for two well known IPR policy revisions: a switch from Fair Reasonable and Non-Discriminatory (FRAND) to Royalty-Free licensing at the World Wide Web Consortium in 2003, and an update of the Institute of Electrical and Electronic Engineers (IEEE) Standards Association's IPR policy in 2015. Overall, we find little evidence that these policy changes caused a decline in participation by patent licensors or reduced innovation in patent-intensive parts of either SSO. This pattern holds for both W3C and IEEE, across numerous measures of participation and innovation, and for a variety of different treatment and control group comparisons. We interpret these findings as evidence that any link between IPR policies, innovation, and SSO participation is much weaker than purely theoretical arguments to the contrary often suggest.

Keywords: Standardization, FRAND, Patents

JEL Classification: L15, O3