Intellectual Property, Competition, and Technical Standards
(2007)Department of Law
- Abstract
- Although lacking a commonly accepted definition, technical standards essentially refers to a set of technical specifications that enable compatibility among products. They may arise through formal standard-setting organizations, or sometimes simply from the market itself. Many of the products for which standards are of importance display network effects. Network effects designate the increasing value of a network with the number of its users (e.g. a telephone network). Markets displaying network effects are prone to end up in standardization where only one or a few technologies remain, inducing ''the winner takes it all'' standards races or cooperative efforts to divide the profits through formal or informal bodies and organizations (from... (More)
- Although lacking a commonly accepted definition, technical standards essentially refers to a set of technical specifications that enable compatibility among products. They may arise through formal standard-setting organizations, or sometimes simply from the market itself. Many of the products for which standards are of importance display network effects. Network effects designate the increasing value of a network with the number of its users (e.g. a telephone network). Markets displaying network effects are prone to end up in standardization where only one or a few technologies remain, inducing ''the winner takes it all'' standards races or cooperative efforts to divide the profits through formal or informal bodies and organizations (from cross-licensing agreements to formal standard-setting organizations). Network effects can also lead to various kinds of market failures. Arbitrary decisions of early users can tip the market and it may be difficult to reverse the process or change to another (even a better) standard once a standard is set (formally or by the market). At the core of deciding the network size and the access to it is the question of compatibility. At the core of compatibility is the question of IPRs. While IPRs generally only grant protection of an expression (copyright) or a solution to a problem (patents), they can confer considerably more power when combined with network effects. The owner of the IPRs essential for compatibility in a tipped network market has a quasi-monopoly. Because this counters the prevailing logic of the IP system, some special IP provisions treat matters of interoperability while other changes in legal design are being suggested. This thesis examines the current legal position as well as some of the proposed changes are being examined in the wider context of innovative incentives and drivers of welfare, concluding (in this part) that an IP solution with respect to standards probably suffers from practical and theoretical disadvantages. Many of the problems arising are due to the changing role of copyright especially with respect to computer software (in a broad sense). A re-design of that (a general software sui generis protection system) would probably ease many of the software related problems. The set of problems attached to network effects and IPRs can also raise competition law concerns. While the judiciary is supervising and imposing some changes in standard-setting through agreements (patent-pools, standard-setting organizations), it seems that the main legal shortcomings are with respect to the very rare cases when measures are needed against a single-firm owning a de facto standard. In that context, the new incentives balance test applied by the Commission in Microsoft might have merit. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1555551
- author
- Alberts, Petter
- supervisor
- organization
- year
- 2007
- type
- H3 - Professional qualifications (4 Years - )
- subject
- keywords
- Konkurrensrätt, Immaterialrätt
- language
- English
- id
- 1555551
- date added to LUP
- 2010-03-08 15:55:17
- date last changed
- 2010-03-08 15:55:17
@misc{1555551,
abstract = {{Although lacking a commonly accepted definition, technical standards essentially refers to a set of technical specifications that enable compatibility among products. They may arise through formal standard-setting organizations, or sometimes simply from the market itself. Many of the products for which standards are of importance display network effects. Network effects designate the increasing value of a network with the number of its users (e.g. a telephone network). Markets displaying network effects are prone to end up in standardization where only one or a few technologies remain, inducing ''the winner takes it all'' standards races or cooperative efforts to divide the profits through formal or informal bodies and organizations (from cross-licensing agreements to formal standard-setting organizations). Network effects can also lead to various kinds of market failures. Arbitrary decisions of early users can tip the market and it may be difficult to reverse the process or change to another (even a better) standard once a standard is set (formally or by the market). At the core of deciding the network size and the access to it is the question of compatibility. At the core of compatibility is the question of IPRs. While IPRs generally only grant protection of an expression (copyright) or a solution to a problem (patents), they can confer considerably more power when combined with network effects. The owner of the IPRs essential for compatibility in a tipped network market has a quasi-monopoly. Because this counters the prevailing logic of the IP system, some special IP provisions treat matters of interoperability while other changes in legal design are being suggested. This thesis examines the current legal position as well as some of the proposed changes are being examined in the wider context of innovative incentives and drivers of welfare, concluding (in this part) that an IP solution with respect to standards probably suffers from practical and theoretical disadvantages. Many of the problems arising are due to the changing role of copyright especially with respect to computer software (in a broad sense). A re-design of that (a general software sui generis protection system) would probably ease many of the software related problems. The set of problems attached to network effects and IPRs can also raise competition law concerns. While the judiciary is supervising and imposing some changes in standard-setting through agreements (patent-pools, standard-setting organizations), it seems that the main legal shortcomings are with respect to the very rare cases when measures are needed against a single-firm owning a de facto standard. In that context, the new incentives balance test applied by the Commission in Microsoft might have merit.}},
author = {{Alberts, Petter}},
language = {{eng}},
note = {{Student Paper}},
title = {{Intellectual Property, Competition, and Technical Standards}},
year = {{2007}},
}