Patent quality and value in discrete and cumulative innovation

CERNA WORKING PAPER SERIES 2010-07International audienceThis article compares the relationship between patent quality and patent value in discrete and cumulative innovation. Using factor analysis and a set of various commonly used patent quality indicators including claims, citations and family size, we build a quality factor jointly driving all indicators for 9255 patents. We then test the significance of this quality factor for predicting patent renewal after 4, 8 and 12 years in an ordered logistic regression. Whereas we establish a robust and significant link between patent quality and value in samples of discrete and complex technology patents, there is no significant link for patents that are essential to technological standards. Consistently, neither the quality factor nor any single indicator allows predicting litigation on an essential patent. We conclude that while there is a robust link between patent quality and value in discrete innovation, this link is much weaker in cumulative innovation. Nevertheless, this affects only narrow, yet highly relevant, technological fields. There is no evidence that cumulativeness affects the relationship between quality and value in whole technological classes classified as “complex” by the literature

Strategic inputs into patent pools

CERNA WORKING PAPER SERIES 2010-05This article explores what factors determine the decision of a patent pool to accept new inputs. We propose a dynamic analysis of 1337 U.S. patent inputs into 7 important pools. This analysis highlights a trade-off between firm and patent characteristics as the determinants of inclusion of patents into pools. For instance we prove that firms already member of the pool or holding large patent portfolios are able to include lower quality patents. These findings can be explained both by bargaining power and information asymmetry. In particular, as measured by a new indicator, insiders and firms practicing the technology file patents that are better aligned with the criteria of essentiality

Patent quality and value in discrete and cumulative innovation

This article compares the relationship between patent quality and patent value in discrete and cumulative innovation. Using factor analysis and a set of various commonly used patent quality indicators including claims, citations and family size, we build a quality factor jointly driving all indicators for 9255 patents. We then test the significance of this quality factor for predicting patent renewal after 4, 8 and 12 years in an ordered logistic regression. Whereas we establish a robust and significant link between patent quality and value in samples of discrete and complex technology patents, there is no significant link for patents that are essential to technological standards. Consistently, neither the quality factor nor any single indicator allows predicting litigation on an essential patent. We conclude that while there is a robust link between patent quality and value in discrete innovation, this link is much weaker in cumulative innovation. Nevertheless, this affects only narrow, yet highly relevant, technological fields. There is no evidence that cumulativeness affects the relationship between quality and value in whole technological classes classified as “complex” by the literature.

Joint innovation in ICT standards: How consortia drive the volume of patent filings

The development of formal ICT standards is a loose form of collaborative innovation: firms first develop rival technologies, some of which are then eventually selected in the standard. Against this background, firms often use informal consortia to define a clearer technology roadmap ahead of the formal standard setting process. The paper aims to assess how such consortia influence the volume of patents filed around standards, and whether this is efficient. We show that their effect actually depends on the strength of firms' incentives to develop the standard. Consortium membership triggers a higher number of patent files when insufficient rewards for essential patents induce underinvestment in the standard. This effect is necessarily pro-efficient. In situations where excessive rewards induce patent races, consortium membership only moderately increases or even reduces their volume of patents. At least in the latter case, the effect of consortia membership is also pro-efficient

Balance Requirements for Standards Development Organizations: A Historical, Legal and Institutional Assessment

Most technical standards-development organizations (SDOs) have adopted internal policies embodying “due process” criteria such as openness, balance of interests, consensus decision making and appeals. These requirements arise from numerous sources including antitrust law, international trade law, public procurement requirements and institutional norms. Yet balance criteria lack a generally-accepted definition and the manner in which they are implemented varies, sometimes dramatically, among SDOs. Recently, there has been a renewed interest in the principle that SDOs should ensure a balance of interests among their stakeholders, including in the development of intellectual property rights policies. This article explores the origins and meaning of the balance requirement in the U.S. and EU, and identifies distinct legal, administrative and institutional modalities in which balance requirements are imposed, as well as existing antitrust and competition law requirements surrounding SDO balance

Balance and Standardization: Implications for Competition and Antitrust Analysis

Most technical standards development organizations (SDOs) have adopted internal policies embodying “due process” criteria such as openness, balance of interests, consensus decision making, and appeals. Unlike other aspects of SDO governance, relatively little scholarly research has considered the history, scope, and interpretation of SDO balance requirements. Likewise, existing case law and agency guidance offer little assistance in understanding precisely how these balance principles translate into specific antitrust requirements that apply to standards development. Given the absence of specific guidance on the meaning and implications of balance requirements for SDOs under the antitrust laws, it is necessary to review the development of the laws, regulations, and institutional norms that have shaped balance requirements and their application by different SDOs more generally. A series of recent events and disputes, however, has focused attention on this understudied area, particularly as it pertains to policies concerning intellectual property rights (IPRs). In this article, we provide an extensive survey of the evolution of SDO balance requirements. First, we describe the origins and evolution of balance requirements at the international level, leading to their inclusion in WTO and ISO/IEC instruments. We next describe how balance requirements went from a feature of SDOs to an element of rule of reason analysis under U.S. antitrust law, finding their way into related statutes as well. We then chart the parallel path of balance requirements in the EU, from national SDO features to components of EU standardization policy and eventually factors in EU competition law analysis. We conclude by exploring the different notions of balance that have evolved and their application to antitrust analysis

The Technical Standardization Ecosystem and Institutional Decision Making: The Case of Intellectual Property Rights Policies

In this paper, we analyze decision making on Intellectual Property Rights (IPR) policies in the standardization ecosystem. While a large literature has studied IPR policies of Standard Developing Organizations (SDOs), we contribute a more rigorous analysis of how these IPR policies are shaped by the interdependencies between SDOs and between SDOs and a variety of stakeholders. While SDO stakeholders often have opposing policy preferences, they are tied together by non-generic complementarities and a joint interest in the overall performance of the standardization system, which are constitutive characteristics of an ecosystem. The standardization ecosystem is characterized by widely shared institutional norms, which – in the field of IPR – result in the preponderance of what we call a “Baseline Policy”. SDOs’ positions in the ecosystem contributes to explain where in the ecosystem institutional innovations going beyond the Baseline Policy are more likely to arise. We analyze different mechanisms of transmission of such novel practices, such as emulation and precedent

The Effect of Patent Pools on Patenting and Innovation -Evidence from Contemporary Technology Standards

Abstract We analyze the effect of patent pools on the incentives to file patents related to a comprehensive sample of Information and Communication Technology (ICT) standards. We measure a positive effect of the announcement of a pool on the filing rates for standard-related patents. We identify an exogenous policy change between 1997 and 1999, when antitrust authorities adopted a more permissive stance towards pooling of patents. An important number of pools were created in the wake or in response to this policy change. Studying these pools, we find a significant increase in patenting rates after pool announcement. This increase in patenting is primarily attributable to future members of the pool, as confirmed by Instrumental Variable regressions using firm-level characteristics associated with a higher likelihood of joining a patent pool. Pool creations taking place in later years could be more easily anticipated. Indeed, we find that the announcements of later pools is preceded by unusually high levels of patenting. Furthermore, we show that pool announcements with a higher likelihood of successful pool creation are followed by a stronger increase in patenting. We find no significant effect of patent pool announcements on the number of citation-weighted patent files

Titrated oral misoprostol solution- a new method of labour induction

Background. Misoprostol, a cheap, stable, orally active prostaglandin analogue, is effective for labour induction when administered either vaginally or orally, but uterine hyperstimulation and rupture have been reported. Previous studies of oral misoprostol for labour induction have used fixed dosages 3 - 6-hourly.Objectives. To develop a new method of misoprostol use for labour induction using very small, frequent, titrated oral dosages, and to pilot effectiveness.Study design. Open clinical pilot study.Setting. Coronation Hospital, an academic hospital in Johannesburg, South Africa.Methods. We developed a method using 2-hourly titrated misoprostol doses commencing with 20 μg, increased after three doses to 40 μg. To administer such small doses we dissolved one rnisoprostol tablet in 200 ml water. A pilot study of this method was undertaken in 25 women with various indications for induction of labour.Results. Eighteen women (72%) delivered vaginally within 32 hours of induction and two women developed uterine hyperstirnulation. The caesarean section rate was 20%.Conclusions. Women may respond to much smaller dosages of misoprostol than are currently in use. A multicentre randomised trial of this method is underway. We emphasise the dangers inherent in the current unregistered use of misoprostol in clinical practice