AN EMPIRICAL EXAMINATION OF PATENT HOLDUP. (20th August 2015)

• Record Type: Journal Article
• Authors: Galetovic, Alexander; Haber, Stephen; Levine, Ross
• Is Part Of: Journal of competition law & economics. Volume 11:Number 3(2015:Sep.)
• Page Start: 549
• Page End: 578
• Publication Date: 2015-08-20
• Subjects: L1 -- O31 -- O38; Antitrust law -- Periodicals; Competition, Unfair -- Periodicals; Foreign trade regulation -- Periodicals; International economic relations -- Periodicals; Competition, International -- Periodicals; 343.072
• DOI: 10.1093/joclec/nhv024
• Languages: English
• ISSNs: 1744-6414

Abstract

Abstract : A large theoretical literature asserts that standard-essential patents (SEPs) allow their owners to "hold up" innovation by charging fees that exceed their incremental contribution to a final product. We evaluate two central, interrelated predictions of this SEP holdup hypothesis: (1) SEP-reliant industries should experience more stagnant quality-adjusted prices than non-SEP-reliant industries; and (2) court decisions that reduce the excessive power of SEP holders should accelerate innovation in SEP-reliant industries. We find no empirical support for either prediction. Indeed, SEP-reliant industries have the fastest quality-adjusted price declines in the U.S. economy.