Working Paper: NBER ID: w13632
Authors: Timothy S. Simcoe; Stuart J.H. Graham; Maryann Feldman
Abstract: This paper studies the intellectual property strategy of firms that participate in the formal standards process. Specifically, we examine litigation rates in a sample of patents disclosed to thirteen voluntary Standard Setting Organizations (SSOs). We find that SSO patents have a relatively high litigation rate, and that SSO patents assigned to small firms are litigated more often than those of large publicly-traded firms. We also estimate a series of difference-in-differences models and find that small-firm litigation rates increase following a patent's disclosure to an SSO while those of large firms remain unchanged or decline. We interpret this result as evidence of a "platform paradox" -- while small entrepreneurial firms rely on open standards to lower the fixed cost of innovation, these firms are also more likely to pursue an aggressive IP strategy that may undermine the openness of a new standard.
Keywords: intellectual property; standards; entrepreneurship; patent litigation
JEL Codes: L00; L17; L26; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| patent disclosures to SSOs (L17) | litigation rates of small firms (K41) |
| patent disclosures to SSOs (L17) | litigation rates of large firms (K41) |
| litigation rates of small firms (K41) | litigation strategies of small firms (K41) |
| patent disclosures to SSOs (L17) | divergence in litigation strategies between small and large firms (K41) |