Standard-Essential Patents

Josh Lerner and Jean Tirole

No 803, IDEI Working Papers from Institut d'Économie Industrielle (IDEI), Toulouse

Abstract: A major policy issue in standard setting is that patents that are ex-ante not that important may, by being included into a standard, become standard-essential patents (SEPs). In an attempt to curb the monopoly power that they create, most standard-setting organizations require the owners of patents covered by the standard to make a loose commitment to grant licenses on reasonable terms. Such commitments unsurprisingly are conducive to intense litigation activity. This paper builds a framework for the analysis of SEPs, identifies several types of ine¢ ciencies attached to the lack of price commitment, shows how structured price commitments restore competition, and analyzes whether price commitments are likely to emerge in the marketplace.

Keywords: Standards; licensing commitments; standard-essential patents; royalty stacking; FRAND; hold ups and reverse hold ups (search for similar items in EconPapers)
JEL-codes: D43 L24 L41 O34 (search for similar items in EconPapers)
Date: 2013-11, Revised 2014-03-13
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr, nep-pr~ and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Standard-Essential Patents (2015)
Working Paper: Standard-Essential Patents (2014)
Working Paper: Standard-Essential Patents (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ide:wpaper:27713

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