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on Law and Economics |
| By: | Geradin, Damien; Layne-Farrar, Anna; Padilla, Atilano Jorge |
| Abstract: | RAND commitments - i.e., promises to license on reasonable and non-discriminatory terms - play a key role in standard setting processes. However, the usefulness of those commitments has recently been questioned. The problem allegedly lies in the absence of a generally agreed test to determine whether a particular license satisfies a RAND commitment. Swanson and Baumol have suggested that "the concept of a ‘reasonable’ royalty for purposes of RAND licensing must be defined and implemented by reference to ex ante competition." In their opinion, a royalty should be deemed 'reasonable' when it approximates the outcome of an ex ante auction process where IP owners submit RAND commitments coupled with licensing terms and selection to the standard is based on both technological merit and licensing terms. In this paper we investigate whether the ex ante auction approach proposed by Swanson and Baumol is likely to deliver efficient outcomes, both from static and dynamic standpoints. We find that given the peculiar characteristics of some of the industries where standardization takes place, in particular the many different business models adopted by innovating companies in those industries, the ex ante auction approach proposed by Swanson and Baumol may not always deliver the right outcomes from a social welfare viewpoint. |
| Keywords: | auctions; fairness; licensing; standard setting |
| JEL: | K21 L24 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6304&r=law |
| By: | Joseph A. McCAHERY; Erik P.M. VERMEULEN; HISATAKE Masato; SAITO Jun |
| Abstract: | In this paper, we have distinguished three different positions along the reform strategy spectrum of company law. The first position is located on the left side of the spectrum and closest to stasis - where virtually no effective legal changes can occur and where only the idea of reform clashes with legal tradition and standardization pressures. An example of a jurisdiction that takes this position is Germany. Along or near the mid-point of the spectrum, company law changes are less impeded by tradition and standardization factors, but more influenced by interest group pressures. We see England occupying this position. Japan can be seen as a more adaptable jurisdiction located toward the right end of the spectrum and therefore better able to create and introduce more functional legal rules and institutions that turn the traditional view of company law around. It is submitted that Singapore is located on the right side of the spectrum as its legislature is aware of the need to adapt the legal system to international business practices in order to develop a distinct jurisprudence, acclaimed for its efficiency and integrity, which is set apart from the English legal system. |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:07033&r=law |