Thursday, June 22, 2023

Love and Helmers on Holdout

Brian Love and Christian Helmers have posted a paper on ssrn titled Patent Hold-Out and Licensing Frictions: Evidence from Litigation of Standard Essential Patents, forthcoming in the International Journal of Industrial Organization.  Here is a link to the paper, and here is the abstract:

The theory of patent “hold-out” posits that frictions in the market for licensing standard-essential patents (SEPs) provide incentives for prospective licensees to opportunistically delay taking licenses with the goal of avoiding or reducing royalty payments. We construct measures of pre- and in-litigation hold-out from information disclosed in U.S. cases filed 2010-2019. Relying on both SEP and a matched control set of non-SEP disputes, we explore whether frictions in the market for licensing are associated with hold-out. We find some evidence of an association between hold-out and both SEP portfolio size and enforcement uncertainty; however, we find no evidence associating pre- or in-litigation hold-out with the international breadth of SEP rights.


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