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STANDARD‐SETTING, INNOVATION SPECIALISTS AND COMPETITION POLICY *
Author(s) -
SCHMALENSEE RICHARD
Publication year - 2009
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/j.1467-6451.2009.00388.x
Subject(s) - competition (biology) , competition policy , negotiation , common value auction , order (exchange) , business , product (mathematics) , industrial organization , product market , ex ante , economics , international trade , microeconomics , finance , law , incentive , political science , ecology , european union , biology , geometry , mathematics , macroeconomics
Using a simple model of patent licensing followed by product‐market competition, this paper investigates several competition policy questions related to standard‐setting organizations (SSO's). It concludes that competition policy should not favor patent‐holders who practice their patents against innovation specialists who do not, that SSO's should not be required to conduct auctions among patent‐holders before standards are set in order to determine post‐standard royalty rates (though less formal ex ante competition should be encouraged), and that antitrust policy should not allow or encourage collective negotiation of patent royalty rates. Some recent policy developments in this area are discussed.