Standard Setting, Market Power and IP Value

Tue Jan 29 15:24:38 EST 2002
By Dr. Lauren Stiroh

What are the antitrust implications for standard setting? The general preconception seems to be that including a particular technology as part of a standard automatically increases the value of that technology and, thus, automatically increases the market power of the technology owner. This increase in value for the technology that would not have occurred had the technology not become a standard is considered undue market power.

In this presentation given at Weil, Gotshal and Manges regarding the upcoming FTC and DOJ Hearings on Antitrust and Intellectual Property Law, Dr. Stiroh discusses the ways in which standard setting can affect patent value and the situtations in which standard setting does not increase the inherent value of a technology. Dr. Stiroh notes that because standard setting does not always convey undue market power, patent policies of standard setting bodies should be flexible enough to allow the patent owner to be compensated for any value of his technology that accrues to the advantages of the technology and not to the standard setting process.