The patent policy debate in the high-techworld

Journal of Competition Law and Economics

Volumn 9, Issue 4, 2013, Pages 827-858

  Gupta, Kirti ^a  

^a QUALCOMM INC   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84888872520     PISSN: 17446414     EISSN: 17446422     Source Type: Journal    
DOI: 10.1093/joclec/nht039     Document Type: Article

References (71)

1. Other forms of IP protection include copyrights, trademarks, trade secrets, and industrial design rights
2. U.S. patent statistics are tracked by the U.S. Patent and Trademark Office.
3. U.S. PATENT & TRADEMARK OFFICE (USPTO), PATENT TECHNOLOGY MONITORING TEAM (PTMT), U.S. PATENT STATISTICS CHART: CALENDAR YEARS 1963-2012, available at http://www.uspto. gov/web/offices/ac/ido/oeip/taf/us_stat.htm.
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7. Dan L. Burk & Mark A. Lemley, Is Patent Law Technology-Specific?, 17
8. BERKELEY TECH. L.J. 1155 (2002). Note that in the more traditional drugs and pharmaceutical industry, one patent typically covers the entire product in the form of a formula for a molecule in a new pill or drug. In contrast, even one semiconductor chip in a smart phone is covered by hundreds of patents, and the smart phone itself-including software, display, user interface, and so forth-is covered by an even higher multiplicity of patents.
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12. Carl Shapiro, Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting, in 1 INNOVATION POLICY AND THE ECONOMY 119 (Adam B. Jaffe, Josh Lerner & Scott Stern eds., Nat'l Bureau of Econ. Research 2001)
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14. Mark A. Lemley & Carl Shapiro, Patent Holdup and Royalty Stacking, 85 TEX. L. REV. 1991 (2007).
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19. James Bessen & Robert M. Hunt, An Empirical Look at Software Patents, 16 J. ECON. & MGMT. STRATEGY 157 (2007)
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24. Anne Layne-Farrar, Jorge Padilla & Richard Schmalensee, Pricing Patents for Licensing in Standard-Setting Organizations: Making Sense of FRAND Commitments, 74ANTITRUST L.J. 671 (2007).
25. Judge Robart's RAND ruling in April 2013 in Microsoft Corp. v. Motorola Inc. raises several of these questions. Microsoft Corp. v. Motorola Inc., No. C10-1823JLR, 2013 WL 2111217 (W.D.Wash. Apr. 25, 2013) (Robart, J.).
26. A PATENT SYSTEM FOR THE 21ST CENTURY (Stephen A. Merrill, Richard C. Levin & Mark B. Myers eds., Nat'l Acad. Press 2004)
27. FED. TRADE COMM'N, THE EVOLVING IP MARKETPLACE: ALIGNING PATENT NOTICE AND REMEDIES WITH COMPETITION (2011) [hereinafter F.T.C., EVOLVING IP MARKETPLACE]
28. Guidelines on the Applicability of Article 101 of the Treaty on the Functioning of the European Union to Horizontal Co-operation Agreements, 2011 O.J. (C11) 1 (EC).
29. Richard A. Epstein, F. Scott Kieff & Daniel F. Spulber, The FTC, IP, and SSOs: Government Hold-Up Replacing Private Coordination, 8
30. J. COMPETITION L. & ECON. 1 (2012). The authors explain how the term ex ante is utilized by the FTC to focus on only an arbitrarily selected group -infringers after they have infringed-unlike throughout the literature where the term is used to refer to the situation that exists before all market actors obtain information about their situation and other market actors. Similarly, they explain the difference between the precise definition of holdup in the economic literature originating from Nobel Prize winning economist OliverWilliamson, where the presence of "guile" is key, versus the repeatedly used definition by the FTC that omits the requirement of "guile" and requires one party of a contract to supply complete insurance for all risks borne by the second party.
31. Fritz Machlup & Edith Penrose, The Patent Controversy in the Nineteenth Century, 10 J. ECON. HIST. 1 (1950).
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33. Pierre Régibeau & Katharine Rockett, Assessment of Potential Anticompetitive Conduct in the Field of Intellectual Property Rights and Assessment of the Interplay Between Competition Policy and IPR Protection, EUR. COMM'N COMPETITION REPORTS (Nov. 2011), available at http://ec.europa.eu/competition/consultations/2012_technology_transfer/study_ipr_en.pdf
34. ("Firstly, different patent rights might cover different aspects of the technology required to produce a new product.... The second source of overlap comes from the nature of patent rights.... In practice this means that a firm with a valid patent covering a given aspect X of a new product might still fear that it might infringe another firm's patent that relates to the same aspect or at least to a similar underlying innovation.").
35. John R. Thomas, Collusion and Collective Action in the Patent System: A Proposal for Patent Bounties, 2001 U. ILL. L. REV. 305
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40. Georg von Graevenitz, StefanWagner & Dietmar Harhoff, How to Measure Patent Thickets- A Novel Approach, 111 ECON. LETTERS 6 (2011)
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42. Michael Noel & Mark Schankerman, Strategic Patenting and Software Innovation, 61 J. INDUS. ECON. 481 (2013).
43. Alberto Galasso & Mark Schankerman, Patent Thickets, Courts, and the Market for Innovation, 41 RAND J. ECON. 472 (2010). The Patent Policy Debate in the High-TechWorld 839
44. David H. Hsu & Rosemarie H. Ziedonis, Resources as Dual Sources of Advantage: Implications for Valuing Entrepreneurial-Firm Patents, 34 STRATEGIC MGMT. J. 761 (2013).
45. Bradford L. Smith & Susan O. Mann, Innovation and Intellectual Property Protection in the Software Industry: An Emerging Role for Patents?, 71 U. CHI. L. REV. 241 (2004).
46. During the recent Microsoft v. Motorola trial before Judge Robart in the Western District of Washington, Microsoft's economic experts were unable, on cross examination, to identify any standard-essential patent license or empirical evidence that they believed reflected "patent holdup" driven terms.
47. Hearing Transcript at 180, Microsoft Corp. v. Motorola, Inc., No. 10-cv-1823 (W.D. Wash. Nov. 13, 2012) (testimony of Kevin Murphy stating that the existence of holdup "is an open question")
48. see also Microsoft Corp. v. Motorola, Inc., No. 10-cv-1823 (W. D. Wash. Nov. 16, 2012) (testimony of Timothy Simcoe stating that that he "can't nail down any particular license from any company as an example of hold-up")
49. Mark A. Lemley & Carl Shapiro, Probabilistic Patents, 19 J. ECON. PERSP. 75 (2005).
50. Damien Geradin, Anne Layne-Farrar & A. Jorge Padilla, Royalty Stacking in High Tech Industries: Separating Myth from Reality (CEPR, Discussion Paper No. DP6091, Feb. 2007), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1132228.
51. Keith Mallinson, Patent Licensing Fees Modest in Total Cost of Ownership for Cellular, IP FINANCE (June 12, 2011), http://ipfinance.blogspot.co.uk/2011/06/patent-licensing-fees-modest-in-total.html.
52. Some standards bodies produce open standards-that is, participants forfeit their IP rights when contributing a technology into the standard-while others produce entirely proprietary standards-that is, standards controlled by a single firm or a group of entities
53. Rudi Bekkers & Andrew Updegrove, A Study of IPR Policies and Practices of a Representative Group of Standards Setting Organizations Worldwide (2012), available at http://home.tm.tue.nl/rbekkers/nas/Bekkers_Updegrove_NAS2012_main_ report.pdf.
54. Marc Rysman & Timothy Simcoe, Patents and the Performance of Voluntary Standard-Setting Organizations, 54MGMT. SCI. 1920 (2008).
55. 3GPP, www.3gpp.org; for more information about the WCDMA-based UMTS standard
56. UMTS, 3GPP, http://www.3gpp.org/Technologies/Keywords-Acronyms/article/umts. Nearly 200 specifications are listed solely for the radio part of the standard.
57. In layman's terms, some examples of fundamental technologies are: innovative coding schemes for coding and decoding voice and data, methods for performing fast and efficient handoff avoiding dropped calls at high speeds, packing multiple antennas in mobile phones to increase the capacity, and so forth
58. Jay P. Choi, Standardization and Experimentation: Ex Ante vs. Ex Post Standardization, 12 EUR. J. POL. ECON. 273 (1996).
59. Carl Shapiro, Setting Compatibility Standards: Cooperation or Collusion?, in EXPANDING THE BOUNDARIES OF INTELLECTUAL PROPERTY 81, 90 (Rochelle C. Dreyfuss, Diane L. Zimmerman & Harry First eds., Oxford Univ. Press 2001).
60. Roy J. Epstein & Alan J. Marcus, Economic Analysis of the Reasonable Royalty: Simplification and Extension of the Georgia-Pacific Factors, 85 J. PATENT & TRADEMARKOFFICE SOC'Y 555 (2003).
61. Jerry A. Hausman, Gregory K. Leonard & J. Gregory Sidak, Patent Damages and Real Options: How Judicial Characterization of Noninfringing Alternatives Reduces Incentives to Innovate, 22 BERKELEY TECH. L.J. 825 (2007).
62. Daniel G. Swanson & William J. Baumol, Reasonable and Nondiscriminatory (RAND) Royalties, Standards Selection, and Control of Market Power, 73 ANTITRUST L.J. 1 (2005).
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65. UC Berkeley Public L. Res. Paper No. 2102865, 2012), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2102865.
66. The FTC decision and order released in January 2012 subsequent to the investigation of Google and Motorola Mobility notes that licensors of SEPs may not require the potential licensee to license any patent not essential to the standard, or another other patent, in a licensing offer made to the potential licensee
67. Philippe Chappatte, FRAND Commitments-The Case for Antitrust Intervention, 5 EUR. COMPETITION J. 319 (2009).
68. Jean O. Lanjouw & Josh Lerner, Preliminary Injunctive Relief: Theory and Evidence from Patent Litigation (NBER, Working Paper No. 5689, July 1996), available at http://www.nber.org/papers/w5689.
69. Vincenzo Denicolò, Damien Geradin, Anne Layne-Farrar & A. Jorge Padilla, Revisiting Injunctive Relief: Interpreting eBay in High-Tech Industries with Non-Practicing Patent Holders, 4 J. COMPETITION L. & ECON. 571 (2008).
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71. David J. Goodman & Robert A. Myers, 3G Cellular Standards and Patents, 1 PROCEEDINGS OF IEEE INTERNATIONAL CONFERENCE ON WIRELESS NETWORKS, COMMUNICATIONS AND MOBILE COMPUTING 415 (2005).