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Patent hold-out and licensing frictions: Evidence from litigation of standard essential patents

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  • Love, Brian J.
  • Helmers, Christian

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.

Suggested Citation

  • Love, Brian J. & Helmers, Christian, 2023. "Patent hold-out and licensing frictions: Evidence from litigation of standard essential patents," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:indorg:v:89:y:2023:i:c:s0167718723000590
    DOI: 10.1016/j.ijindorg.2023.102978
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    References listed on IDEAS

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