Patent Holdouts in the Standard-Setting Process

Doug Lichtman, Professor of Law at The University of Chicago.

2/27/2008
(Original Publish Date: 5/1/2006)

Technical standards are often subject to massively overlapping patent protections. The protocol that governs how information is stored on DVD-R media, for example, is known to implicate at least 177 different patents. RFID technology—those electronic tags that Wal-Mart and the Department of Defense increasingly require their suppliers to use—is at this point rumored to implicate over 4,000. Firms interested in implementing heavily patented protocols like these typically approach the issue by joining together to form a standard-setting organization, a patent pool, or some other licensing intermediary. That intermediary endeavors to identify the relevant patents and, subject to the constraints of antitrust law, organize the various patentees such that interested firms can in the end license necessary patents collectively.