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Lou, Zhaohui, Yao, Shujie and Zhang, Xinwen (2021) 'The Optimal Patent Portfolio of The Technology Standards Alliances in Innovation Competition.' Emerging Markets Finance and Trade, 58 (6). pp. 1794-1805.

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Abstract

Unlike the dominant theories based on the rigid assumption that “technology standards must contain only essential patents”, this paper discusses the standard alliances that are engaged in their cumulative innovation. Its focus is particularly on a more realistic setting that a standard alliance should contain both the essential and the non-essential patents. We use the essential-patent’s ratio, which denotes the percentage of the essential patents in the total patents in a standard, as the cumulative innovation model’s core variable. The mathematical analysis illustrates that the essential-patent’s ratio performs an important role in the arguments’ standards. There is an optimal portfolio that maximizes the alliances’ efficiency in an innovation competition. It implies that the social welfare effects depend on the dynamic trade-off between the long-term technical gap caused by the technological upgrades’ missing opportunities and the short-term welfare losses that consumers may suffer. The patents’ and antitrust laws should tolerate a certain number of non-essential patents being contained by the technology standards.

Item Type: Journal Article
Keywords: General Economics, Econometrics and Finance, Finance
SOAS Departments & Centres: Departments and Subunits > Department of Economics
ISSN: 1540496X
DOI (Digital Object Identifier): https://doi.org/10.1080/1540496x.2021.1918544
SWORD Depositor: JISC Publications Router
Date Deposited: 26 Apr 2022 16:45
URI: https://eprints.soas.ac.uk/id/eprint/37120
Funders: Other, Other, Other, Other

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