An Empirical Examination of Patent Hold-up

Alexander Galetovic, Stephen Haber and Ross Levine ()

No 21090, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A large literature asserts that standard essential patents (SEPs) allow their owners to “hold up” innovation by charging fees that exceed their incremental contribution to a final product. We evaluate two central, interrelated predictions of this SEP hold-up hypothesis: (1) SEP-reliant industries should experience more stagnant quality-adjusted prices than similar non-SEP-reliant industries; and (2) court decisions that reduce the excessive power of SEP holders should accelerate innovation in SEP-reliant industries. We find no empirical support for either prediction. Indeed, SEP-reliant industries have the fastest quality-adjusted price declines in the U.S. economy.

JEL-codes: K11 O31 O34 O38 (search for similar items in EconPapers)
Date: 2015-04
New Economics Papers: this item is included in nep-com, nep-ind, nep-ino, nep-ipr, nep-pr~ and nep-tid
Note: IO PR
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Citations: View citations in EconPapers (3)

Published as Alexander Galetovic & Stephen Haber & Ross Levine, 2015. "An Empirical Examination Of Patent Holdup," Journal of Competition Law and Economics, Oxford University Press, vol. 11(3), pages 549-578.

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Journal Article: AN EMPIRICAL EXAMINATION OF PATENT HOLDUP (2015)
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