Since the 1990s, intellectual property rights have become increasingly important in the telecommunications sector. In particular, the strategic role of patents played in the GSM standard irrevocably changed the IPR strategies within the sector, increasing both the revenues and barriers provided by telecom patents.
The issues raised by GSM foreshadowed comparable impacts of patents upon other ICT standards. These developments parallels broader concerns raised by researchers about the risk that such patents impede the process of cumulative innovation, a problem some have labeled “the tragedy of the anticommons.” After reviewing research on the various controversies regarding patents, cumulative innovation and standardization, we review the evolution of the role of patents in telecommunications standards.
We then analyze the role of 1227 unique “essential” patents declared in the standardization of Universal Mobile Telecommunications System (UMTS), the thirdgeneration successor to GSM. Using a combination of data sources, we show how differences in the timing, nature and scope of patenting activities relate to firms’ business models, competitive position and role in the standardization activity.
From this, we offer broader observations about the limits of existing IPR policies and coordination mechanisms, as well as the likely impact of various policy alternatives on patent proliferation in telecommunications standardization.