To: Qpeeper who wrote (57571 ) 12/9/2006 1:05:26 AM From: waitwatchwander Respond to of 196511 The Effect of Strategic Patenting on Cumulative Innovation in UMTS Standardizationhome.tm.tue.nl [Another paper floating in from across the pond evaluating UMTS patents] Rudi Bekkers Eindhoven Center for Innovation Studies (ECIS), Technische Universiteit Eindhoven Den Dolech 2, P.O. Box 513, 5600 BM Eindhoven, The Netherlands R.N.A.Bekkers@tm.tue.nl Joel West Associate Professor, College of Business, San José State University One Washington Square, San José, CA 95192-0070 USA Joel.West@sjsu.edu Paper for the DIME Workshop on Rules, norms and standards in corporate and sectoral IPR practices when profiting from technological innovations and innovations in creative expressions, March 24th, 2006 Abstract Since the 1990s, intellectual property rights have become increasingly important in the telecommunications sector. In particular, the strategic role of patents played in the GSM standard irrevocably changed the IPR strategies within the sector, increasing both the revenues and barriers provided by telecom patents. The issues raised by GSM foreshadowed comparable impacts of patents upon other ICT standards. These developments parallels broader concerns raised by researchers about the risk that such patents impede the process of cumulative innovation, a problem some have labeled “the tragedy of the anticommons.” After reviewing research on the various controversies regarding patents, cumulative innovation and standardization, we review the evolution of the role of patents in telecommunications standards. We then analyze the role of 1227 unique “essential” patents declared in the standardization of Universal Mobile Telecommunications System (UMTS), the thirdgeneration successor to GSM. Using a combination of data sources, we show how differences in the timing, nature and scope of patenting activities relate to firms’ business models, competitive position and role in the standardization activity. From this, we offer broader observations about the limits of existing IPR policies and coordination mechanisms, as well as the likely impact of various policy alternatives on patent proliferation in telecommunications standardization.