Mapping standards to patents using declarations of standard‐essential patents

• Author: Tim Pohlmann,Justus Baron
• DOI: http://doi.org/10.1111/jems.12255
• Date: 01 September 2018
• Published date: 01 September 2018

Received: 8 September 2015 Revised: 12 November2016 Accepted: 15 February 2017

DOI: 10.1111/jems.12255

ORIGINAL ARTICLE

Mapping standards to patents using declarations of

standard-essential patents

Justus Baron1Tim Pohlmann2,3

1Searle Center on Law,Regulation and Eco-

nomic Growth, Northwestern University,

Chicago, Illinois

2Berlin Universityof Technology, Faculty

of Economics and Management, Chair of

InnovationEconomics, Berlin, Ger many

3IPlytics GmbH, Berlin, Germany

Correspondence

JustusBaron, Searle Center on Law, Regulation

andEconomic Growth, Northwestern Univer-

sity,375 East Chicago Avenue, Chicago, IL

60611.

Email:Justus.Baron@law.northwestern.edu

Abstract

This paper describes a new database of declared standard-essential patents (SEPs),

discusses methods for matching declared SEPs to specific standard documents,

and presents empirical evidence on technology standards subject to declared SEPs.

Although there is a growing body of empirical research using data on declared SEPs,

this research has so far focused on the declared patents, and neglected the impli-

cations of SEP declarations for specific standards. Furthermore, we present a new

methodology for matching standards with technology classes, using the classification

of declared SEPs. This method allows identifying other standard-related patents, and

provides information on technological relationships between standards and standard-

related patenting. The paper discusses opportunities for new empirical research using

databases of declared SEPs and data on patenting in standard-related technology

classes.

KEYWORDS

patents, standard-essential patents, technological classification, technology standards

JEL CLASSIFICATION:

L15, O34, Y10

1INTRODUCTION

Patent statistics are an important window into technological innovation. Economists use widely available databases with biblio-

graphic characteristics of patents, and in particular patent citations, to study, for example, inventive activities, technology trans-

fers, and productivity growth. Statistical information on technology standards is not yet as widely used in economic research,

but bibliographical information on technology standards may provide complementary information on processes of technological

progress and change (Baron & Schmidt, 2017; Baron & Spulber, 2018). In particular, many instances of technological innova-

tion can best be studied by combining patents and standards data. This paper discusses a new dataset mapping standards to

technologically related patents in order to facilitate empirical research on technological innovation using data on both patents

and standards.

Both patents and standards documents describe, define, and codify technologies. The role and scope of patents and standard

documents are however very different. Patents describe new inventions, and they constitute a temporary legal right to exclude

The database described in this paper is available to academic researchers upon request. All inquiries should be sent to searlecenter@law.northwestern.edu or

Justus.Baron@law.northwestern.edu.

Research at the Searle Center on Law,Regulation, and Economic Growth related to this paper was financially supported by Qualcomm.

∗Managing Director, IPlytics GmbH.

504 © 2018 Wiley Periodicals, Inc. J Econ Manage Strat. 2018;27:504–534.wileyonlinelibrary.com/journal/jems

BARON AND POHLMANN 505

others from using practices and products that are novel and original. Standards on the other hand define commonly accepted

techniques. Standards reflect an agreement between different individuals, firms, or other entities to use a particular method,

which may be novel or not. Standards may also govern the access to technology, because standard-setting organizations(SSOs)

often require their members to license proprietary technology that is necessary for the implementation of a standard on specified

terms.

In spite of being of a very different nature, patents and standards interact in several important ways.Most impor tant, standards

can prescribe methods that are protected by Intellectual Property Rights (IPR), most commonly patents. If a standard cannot

be implemented without practicing a patented technology, this patent is called a standard-essential patent (SEP). Although

particularly important, SEPs are only a subset of the patents related to standards. Patented methods may merely be useful, but not

essential, for implementing a standard. Many other patents protect inventions that implement a standard without being the only

possible way to implement this particular standard. Furthermore, many patented inventions are made in the process of standard

development (e.g., address a specific need or problem in a standardized technology), but not included in the standard. Indeed,

many different firms make contributions to standards under development, and contributions are subject to vote bySSO members.

Standards and patents describe an interesting interaction in the development of new technologies. Firms, universities, public

research institutes, or other entities carry out research and development (R&D) and invent and patent a variety of new methods

and products. The inventors of different technological methods along with the users of the technology and other stakeholders get

together SSOs to select particular methods for common use. The standards developed in SSOs are an input for further inventive

activity, resulting in the development of products and new technologies implementing the selected standard. Standardization

and invention are in fact parallel processes: inventors respond to the needs and objectives defined by SSOs, and SSOs redefine

standards based upon new technological developments.

In the light of the important interactions between patenting and standard development, a joint empirical analysis of patents

and standards can reveal novel insights on technological innovation. Such a joint analysis of patents and standards is however

challenging. Some patents can be related to specific standards, for example, because they were declared by their owners as

SEPs. Not all SEP declarations clearly reference a specific standard document, and the matching of SEP declarations to specific

standard documents is not straightforward. Furthermore, declared SEPs are not necessarily actually standard-essential, and not

all actual SEPs are necessarily accurately declared. Finally,t he population of patents directlyrelated to a standard is much larger

than the group of narrowly defined SEPs. There is to date no system for identifying standard-related patents that are not declared

as SEPs, for example, based on their classification in the Cooperative Patent Classification (CPC).1

This paper describes a database mapping standard documents to technologically related patents in order to facilitate the

joint empirical analysis of patenting and standardization. First, the database provides the most comprehensive information on

declared SEPs that currently exists. Second, this is the first database matching declared SEPs to specific standard documents.

Third, the database uses information from the declared SEPs to map patents to standards using a detailed system of technological

classification. The database presented in this paper shares a common system of identifiers with the Searle Center Database of

Technology Standards and SSOs (Baron & Spulber, 2018), and a database with detailed procedural data on standardization

processes at one particularly important SSO (Baron & Gupta, 2018).2

The remainder of this paper is organized as follows.Section 2 reviews the existing empirical literature on technology standards

and patents, and discusses the data and methods that have been used in the past to study the interaction between standard

development and patenting. Section 3 discusses the methodology of data collection and the construction of the database. Section

4 provides descriptive statistics and statistical evidence derived from this new database. Section 5 discusses avenues for future

research using this new database, and section 6 concludes the paper.

2LITERATURE REVIEW

The interface between patents and technology standards has recently attracted wide academic interest and attention from policy

makers. The current interest focuses on SEPs, that is, patents that are necessarily infringed by any implementation of a standard.

Some standards define complex technologies that are believed to include large numbers SEPs owned by many different firms.

This situation has been referred to as “patent thicket” (Shapiro, 2001) and is often viewed as a reason forconcer n. Manyauthors

raise the argument that “stacking” multiple complementary patents could lead to excessive levelsof aggregate royalty rates (e.g.,

Lerner & Tirole, 2004; Lerner & Tirole, 2015; Llanes & Trento, 2012; Llanes & Poblete, 2014). Another perceived risk is the

possibility of patent hold-up, that is, an opportunistic increase in royalty levels for a patent after an SSO makes irreversible

choices in standardization, and after standard users incur sunk costs in implementing the standard (Farrell, Hayes, Shapiro, &

Sullivan, 2007; Lemley & Shapiro, 2006).