Galetovic A., Haber S., Innovation Under Threat? An Assessment of the Evidence For Patent Hold-Up and Royalty Stacking In Sep-Intensive, IT Industries, Antitrust Chronicle, Vol.1, Autumn, 49-55, 2016
Most electronic devices we use such as smartphones, laptop computers, televisions or audio systems rely on technological standards that make them interoperable. Technology standards enable the owner of a Samsung Galaxy to call a friend subscribed to a different network who uses an iPhone, switch to WiFi while at home, or make a video recording that can be edited on a laptop and then viewed on a TV or tablet. A myriad of firms design apps that enable the owner of that smartphone to order a cab, read her favorite magazine or apply for a home mortgage. Yet Patent Holdup Theory, an influential body of thought among legal academics and antitrust authorities around the world, predicts market failure in precisely these SEP-intensive, information technology (“IT”) industries.