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Showing 9 of 15 Publications by David Teece
Presentations & Interviews ICLE Academic Affiliate David Teece was a guest on the Insights from the Top podcast to discuss the importance of gender and racial diversity in . . .
ICLE Academic Affiliate David Teece was a guest on the Insights from the Top podcast to discuss the importance of gender and racial diversity in corporate governance, the state of securitization in emerging markets, what ownership means for rising attorneys, and how the firm has remained strong for more than a century. The full episode is embedded below.
Scholarship Summary One of the world’s greatest experiments in open innovation is mobile wireless. Technology enterprises have invested billions of R&D dollars to develop 2G, 3G, . . .
One of the world’s greatest experiments in open innovation is mobile wireless. Technology enterprises have invested billions of R&D dollars to develop 2G, 3G, 4G, now 5G, and hopefully 6G soon. Technology developers make investments and look to the patent system and associated regulators to reward them for risky investments, should their patented technologies become included in the standards. In recent years there has been an uptick in the number of technology implementers. But because patents are not self-enforcing, unlicensed use occurs, which is corrosive of the open innovation system that allows non-vertically integrated firms to compete at the device level. This chapter reviews antitrust theories that some implementers have used to avoid paying royalties to patent owners. This is examined in the context of the FRAND licensing regime established by ETSI, a standards development organization. “Hold up” and “hold out” theories are examined. Hold up theories lack empirical support and are misused by some implementers—particularly those in China—who would prefer to free ride on the R&D investments of others. Restoring and revitalizing technology markets for mobile wireless likely requires limits to be placed on the availability of FRAND licenses with respect to recalcitrant technology implementers. Otherwise, the innovation ecosystem will be harmed, and open innovation (that is, licensing) business models will collapse.
Scholarship Abstract This paper builds on previous work addressing the problem of “hold-out” in the licensing of standards essential patents (SEPs) in mobile cellular communications technology. . . .
This paper builds on previous work addressing the problem of “hold-out” in the licensing of standards essential patents (SEPs) in mobile cellular communications technology. Given the pervasiveness of mobile technology, and the need to maintain continued innovation in such technology, the robustness of the licensing marketplace for patents is an economically important issue. We show how the ease with which implementers of such technology such as smartphone makers can use the technology without having agreed to licenses is a major structural factor that shifts bargaining power in licence negotiations towards the implementers. Together with frictions in the enforcement process, and the increasing propensity to resist licensing by new groups of implementers (i.e., “hold out”) we explain why there is an elevated risk that the licensing marketplace may produce outcomes that are inconsistent with the “balance” that Standards Development Organizations (“SDOs”) such as ETSI have sought out. The ability of the licensing marketplace to strike this balance is critical to the continued robustness of the wireless ecosystem. We explain that there is a risk that the SEP holders’ obligation to be prepared to make licences available on Fair, Reasonable and Non-Discriminatory (FRAND) terms can be used to “bound” the worst case scenario for an implementer– i.e., that it can never do worse than receiving the “FRAND” royalty. We discuss how courts and policymakers should sensibly interpret the bounds and limits of the FRAND commitment, in order to respect the overarching goals of “balance” and robust innovation in the ecosystem.
Scholarship Abstract Murmann and Vogt’s (2022) analysis of the automobile industry using a capabilities framework that integrates both dynamic and ordinary capabilities supports an informative table . . .
Murmann and Vogt’s (2022) analysis of the automobile industry using a capabilities framework that integrates both dynamic and ordinary capabilities supports an informative table which sets out the major relevant capabilities that incumbents, start-ups, and diversifying entrants would need to develop or access via contract or other arrangement (see Murmann and Vogt, 2022, Table 3). Jiang and Lu (2022) have further discussed new industry paradigms which they suggest will greatly challenge – and perhaps overwhelm automotive industry incumbents. We believe that their insights can be taken a step further by focusing on two areas: first, the greatly increased availability of outsourced manufacturing driven by the shift to electric vehicle (‘EV’) powertrains; and second, the ongoing transformation of the driver and passenger experience that is driven by software–user experience software integrated with networked consumer service ecosystems.
Presentations & Interviews Competition Policy International interviewed ICLE Academic Affiliate David Teece in September 2022. In the video embedded below, he discusses the concept of “potential competition” and . . .
Competition Policy International interviewed ICLE Academic Affiliate David Teece in September 2022. In the video embedded below, he discusses the concept of “potential competition” and the consumer-welfare effects of startup acquisitions.
Presentations & Interviews ICLE Academic Affiliate David Teece was a guest, along with Patrick Kilbride of the Global Innovation Policy Center of the U.S. Chamber of Commerce, on . . .
ICLE Academic Affiliate David Teece was a guest, along with Patrick Kilbride of the Global Innovation Policy Center of the U.S. Chamber of Commerce, on IPWatchdog‘s Understanding IP Matters podcast that focused on whether U.S. policymakers have taken for granted the role intellectual property plays in shaping the nation’s ability to innovate and driving its economic advantage. The full episode is embedded below.
Written Testimonies & Filings As former judges and government officials, legal academics and economists who are experts in antitrust and intellectual property law, we write to express our support . . .
As former judges and government officials, legal academics and economists who are experts in antitrust and intellectual property law, we write to express our support for the Avanci business review letter issued by the Antitrust Division of the U.S. Department of Justice on July 28, 2020 (the “2020 business review letter”). The 2020 business review letter represented a legally sound and evidence-based approach in applying antitrust law to innovative commercial institutions like the Avanci patent pool that facilitate the efficient commercialization of new standardized technologies in the fast-growing mobile telecommunications sector to the benefit of innovators, implementers, and consumers alike.
Read the full letter here.
Scholarship Abstract For much of its existence, the academic and policy debate on standards essential patents (SEPs) in mobile telecommunications was driven by the theory of . . .
For much of its existence, the academic and policy debate on standards essential patents (SEPs) in mobile telecommunications was driven by the theory of “hold up”— the ability of SEP owners to supposedly extract value well beyond the contribution of their technology to downstream products. This theory of hold up was never empirically validated, and even as a theory, took no account of the non-self-enforcing nature of patents, including SEPs. Injunctive relief for infringement is far from automatic, and litigation is costly and carries asymmetric risks for licensors. In reality, licensors are often able to collect payment only several years after infringement began, may sometimes end up agreeing to rates that are too low to incentivise future investment, and may often be unable to collect payment for all the period of infringement by the implementer. Thus “hold out” by licensees who wish to delay, avoid and reduce payment for their use of SEPs is a potentially greater danger than “hold up.”
If injunctions are difficult to obtain and the eventual remedy for infringement is to take a license and pay damages based on FRAND rates, there is little positive incentive for licensees to take licenses. Instead, it is attractive for licensees to delay and force licensors into litigation. The attractiveness and increasing pervasiveness of such behaviour risks disrupting the “balance” of incentives that is sought by standards development organisations such as the European Telecommunications Standards Institute (ETSI), which has been responsible for shepherding the development of mobile telecommunications standards. The long-term consequences of disrupting this balance will likely be a diminished rate of future innovation, and the potential replacement of a remarkably successful model of “open innovation” by more closed models.
This paper suggests potential correctives to the holdout problem. The correctives involve the strengthening of injunctive relief regimes, and the recognition by Courts and policy-makers (especially antitrust or competition agencies) that achieving the “balance” sought out by ETSI may require limiting or withdrawing the unlimited availability of FRAND licenses for unwilling licensors. Courts and agencies should recognise that SEP holders are only obliged to be prepared to make FRAND licenses available, but also recognise that licensors are not compelled to conclude FRAND licenses with unwilling licensees. At the very least, Courts that are often asked to determine FRAND rates based on evaluating “comparable licenses” can still take measures that avoid putting unwilling licensees on the same footing as those who willingly negotiated “comparable” licenses.
Regulatory Comments Comments of Scholars of Law, Economics, and Business Draft USPTO, NIST, & DOJ Policy Statement on Licensing Negotiations and Remedies for Standard-Essential Patents Subject to . . .
We are scholars of law, economics, and business who work in areas related to intellectual property, antitrust, strategy, and innovation. We write to express our concerns with the December 6, 2021, U.S. Patent & Trademark Office (USPTO), National Institute of Standards and Technology (NIST), and U.S. Department of Justice, Antitrust Division (DOJ) draft statement on remedies for the infringement of standard-essential patents (SEPs) (“Draft Policy Statement”).[1] This statement would effectively repudiate guidance published by these same agencies in 2019.[2]
While the Draft Policy Statement may seem even-handed at first sight, its implementation would have far-reaching consequences that would significantly tilt the balance of power in SEP-reliant industries, in favor of implementers and to the detriment of inventors. In turn, this imbalance is liable to harm consumers through reduced innovation, resulting from higher contract-enforcement costs and lower returns to groundbreaking innovations. And by making it harder for U.S. tech firms to enforce their intellectual property (IP) rights against foreign companies, the Draft Policy Statement threatens to erode America’s tech-sector leadership.
Read the full comments here.
[1] U.S. Patent & Trademark Office, the National Institute of Standards and Technology, and the U.S. Department of Justice, Antitrust Division, Draft Policy Statement on Licensing Negotiations and Remedies for Standard-Essential Patents Subject to Voluntary F/RAND Commitments (Dec. 6, 2021), available at https://www.justice.gov/atr/page/file/1453471/download [hereinafter “Draft Policy Statement”].
[2] U.S. Patent & Trademark Office, the National Institute of Standards and Technology, and the U.S. Department of Justice, Antitrust Division, Policy Statement on Licensing Remedies for Standard-Essential Patents Subject to Voluntary F/RAND Commitments (Dec. 19, 2019), available at https://www.uspto.gov/sites/default/files/documents/SEP%20policy%20statement%20signed.pdf.
