Complements Problem within Standard Setting, The: Assessing the Evidence on Royalty Stacking

Interoperability, Intellectual Property, Competition Policy and Antitrust, Patents and Standards

Article Snapshot

Author(s)

Damien Geradin, Anne Layne-Farrar and Jorge A. Padilla

Source

Boston University Journal of Science and Technology Law, Vol. 14, No. 2, 2008

Summary

This papers asks if patents make products too expensive for consumers.

Policy Relevance

Problems with patents that trouble economists in theory are not necessarily serious in the real world.

Main Points

  • Sometimes, the technology incorporated in standards is patented, so producers of the product that use the standard must pay to use the technology.

 

  • Some observers worry that If each patent holder charges a bit for the technology going into a product, it can add up to a lot of expense for consumers in the price of the final product (“royalty stacking”).

 

  • Others note that patent holders are under pressure to license their patents widely at a reasonable rate before they expire.

 

  • The authors find little evidence that patent holders are holding out for high license fees, and conclude that royalty stacking is not a problem in reality.

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