‘Tis the season when the Nobel Prizes get announced, when science and scientists get their share of media attention. This blog joins in the chorus.
Your inventions don’t need to be Nobel-class to get patent protection, but the Physics and Chemistry laureates do hold patents, dozens of them and really fresh ones too. This year however, Awapatent IP Blog directs the spotlight to someone special, Jean Tirole, who is the Economy laureate¹ – and does research on patents!
In one recent article, Prof. Tirole and coauthor study standard-essential patents, the legal rights that committees like the ETSI, MPEG or IEEE have promoted into industry-wide norms. A patent that makes it into a standard will be a basis for steady royalty income, albeit moderated to be FRAND². In complex technologies where hundreds of patents may be essential, basically everyone pays to use the standard, but the stronger your own portfolio is, the smaller your net payment.
The article is joyful reading for a telecom patent attorney like myself. With a background in mathematical research, I also don’t mind spices like Brouwer’s fixed point theorem and other tools from convex optimization theory that Prof. Tirole uses to explore the effects produced by this workflow:
These and other statements are proved:
- The competitive equilibrium of the licensing game is unique under certain conditions.
- A patent holder is more eager to avoid price commitments the less essential his patent.
- If technical functionalities in the candidate IP are ranked by their essentiality, the selection of a standard delivers suboptimal social welfare.
- So-called structured price commitments would be a better way to negotiate new standards.
Anders Hansson, European Patent Attorney
1) Strictly speaking, he is the awardee of the Nobel Memorial Prize in Economic Sciences.
2) Fair, reasonable and non-discriminatory – a licensing obligation that is often required by standardizing organizations for members that participate in the standard-setting process.