Standard-Essential Patents within Global Networks – An Emerging Economies Perspective
Published: 11/21/16
Publication: SSRN
Efficient licensing of standard-essential patents (SEPs) is crucial for achieving a rapid and broad-based diffusion of innovation. Owners of large SEP portfolios (and their supporters) argue that the governance of SEPs works reasonably well and that patent holdup and other negative effects are “purely theoretical”. In reality however, the governance of SEPs remains highly inefficient.
Nobel prize laureate Jean Tirole as well as Carl Shapiro, Mark Lemley, Josh Lerner and many others have painstakingly […]
The Smartphone Royalty Stack: Surveying Royalty Demands for the Components Within Modern Smartphones
Published: 1/1/14
This article estimates the royalty stack for smartphones on the basis of publicly available information regarding licensing terms. The article presents a “bottom-up” analysis of smartphone royalties by examining the potential royalty burden on the major technologies and components in smartphones. According to the article, “setting aside off-sets such as ‘payments’ made in the form of cross-licenses and patent exhaustion arising from licensed sales by component suppliers,” the “estimate[d] potential patent royalties [are] in excess of […]
Standard Setting, Patents, and Hold-Up
Published: 12/19/13
Publication: Antitrust Law Journal
This article discusses the problem of patent hold-up, which arises because the adoption of standards increase the value of patents once they are incorporated into standards. Those “standard essential patents” must now be licensed based on their ex ante value, when alternative technologies could have been used before the standard was finalized. The article explores a number of facets to the problem of patent hold-up in the standards context, including the fact that […]
Strategic Patent Acquisitions
Published: 7/2/13
Publication: Antitrust Law Journal
This economic paper, focused largely on patent assertion entities, also explains that even a risk-neutral licensee would be willing to pay more than three times the FRAND value of a SEP to avoid the smallest chance of losing in court.
Injunctions, Hold-Up, and Patent Royalties
Published: 10/19/10
Publication: American Law and Economics Review
Carl Shapiro, a leading competition economist and a former Chief Economist in the U.S. Justice Department’s Antitrust Division, applied an economic model which “shows that for weak patents covering a minor feature of a high-margin product that takes time to redesign, a large fraction of negotiated royalties can be attributable to hold-up, not to the value of the patented technology. This finding holds whether or not the downstream firm was aware […]
Patent Holdup and Royalty Stacking
Published: 8/10/06
Publication: Texas Law Review
This article used bargaining theory to show “that the threat to obtain a permanent injunction greatly enhances the patent holder’s negotiating power, leading to royalty rates that exceed a natural benchmark range based on the value of the patented technology and the strength of the patent.” Lemley and Shapiro also “show how holdup problems are magnified in the presence of royalty stacking, i.e., when multiple patents read on a single product.” They used […]