AN EMPIRICAL EXAMINATION OF PATENT HOLDUP

Alexander Galetovic, Stephen Haber and Ross Levine ()

Journal of Competition Law and Economics, 2015, vol. 11, issue 3, 549-578

Abstract: A large theoretical 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 holdup hypothesis: (1) SEP-reliant industries should experience more stagnant quality-adjusted prices than 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: L1 O31 O38 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (11)

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Working Paper: An Empirical Examination of Patent Hold-up (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:jcomle:v:11:y:2015:i:3:p:549-578.

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