| Abstract: |
In a model of industry standard setting with private information about firms'
intellectual property, we analyze (a) firms' incentives to contribute to the
development and improvement of a standard, and (b) firms' decision to disclose
the existence of relevant intellectual property to other participants of the
standard-setting process. If participants can disclose after the end of the
process and fully exploit their bargaining leverage, then patent holders
aspire to disclose always after the end of the process. However, if a patent
holder cannot rely on the other participants to always contribute to the
process, then it may be inclined to disclose before the end of the process. We
also analyze under which conditions firms enter cross-licensing agreements
that eliminate the strategic aspect of patent disclosure, and show that, in an
institutional setting that implies a waiver of intellectual property rights if
patents are not disclosed timely, firms aspire to disclose before the end of
the process. Finally, we study the effect of product-market competition on
patent disclosure. |