EconPapers    
Economics at your fingertips  
 

"Essential" Patents, FRAND Royalties and Technological Standards

Mathias Dewatripont () and Patrick Legros

Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: In this paper we abandon the usual assumption that patents bring known benefits to the industry or that their benefits are known to all parties. When royalty payments are increasing in one's patent portfolio, private information about the quality of patents leads to a variety of distortions, in particular the incentives of firms to "pad" by contributing weak patents. Three main results that emerge from the analysis are that: (i) the threat of court disputes reduces incentives to pad but at the cost of lower production of strong patents; (ii) mitigating this undesirable side-effect calls for a simultaneous increase in the cost of padding, that is, a better filtering of patent applications; (iii) upstream firms have more incentives to pad than vertically-integrated firms which internalize the fact that patent proliferation raises the share of profits going to the upstream segment of the industry but at the expense of its downstream segment. This seems consistent with recent evidence concerning padding.

Keywords: padding; royalty; standard setting organization; weak patent; Frand (search for similar items in EconPapers)
JEL-codes: L24 L40 O31 O34 (search for similar items in EconPapers)
Pages: 30 p.
Date: 2008-03
New Economics Papers: this item is included in nep-ino, nep-ipr and nep-pr~
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Published by:

Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/5407 ... _wpaper_2008_010.pdf RePEc_eca_wpaper_2008_010 (application/pdf)

Related works:
Journal Article: ‘Essential’ Patents, FRAND Royalties and Technological Standards (2013) Downloads
Working Paper: 'Essential' patents, FRAND royalties and technological standards (2013)
Working Paper: 'Essential' Patents, FRAND Royalties and Technological Standards (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eca:wpaper:2008_010

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... ulb.ac.be:2013/54078

Access Statistics for this paper

More papers in Working Papers ECARES from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().

 
Page updated 2021-05-14
Handle: RePEc:eca:wpaper:2008_010