Innovation policy within private collectives: Evidence on 3GPP׳s regulation mechanisms to facilitate collective innovation

• This paper identifies private-collectives as effective institutions to develop technologies.
• A key aspect in private-collectives is the management of IPrights.
• Essential patents, FRAND licensing and maximum royalty rate are instrumental in some P-Cs.
• Current antitrust regulation needs to be adapted to facilitate innovation in the digital economy.

This article provides insights on how to manage collective innovation in the digital economy, an innovation regime which is riddled with complex regulatory challenges and increasing litigation over intellectual property rights. Private collective organizations face two main challenges: (1) to promote collective innovation while preserving the private interests of the firms within the collective, and (2) to ensure that collective innovation does not weaken healthy competition. Through a case study of the Third Generation Partnership Project (3GPP), an exemplary private collective federation of organizations composed of standardization bodies, industry consortia and technology producers, we identify organizational solutions to these challenges. We find that a combination of specific IP rights instruments is key to manage these trade-offs. We also find that the combined policies of essential patenting, FRAND, and maximum royalty rate help overcome the specific challenges associated with collective innovation within competitive contexts. Finally we discuss the implications of our findings for managers and for policy.