Filing behaviour regarding essential patents in industry standards

This article addresses companies’ filing behaviour in respect of patents relevant for standard-setting (“essential patents”). We discuss applicants’ incentives to achieve conformity of patent applications with technology standards under development. Based on these incentive structures, we hypothesise that the claims of essential patents are amended more often than those of comparable patents. Additionally, we argue that applicants have incentives to delay the grant decision. As a result, essential patents are hypothesised to have longer pendency times than comparable patents. This implies more possibilities for applicants to exploit the flexibility within the patent application process to amend the claims of pending patent applications. For empiric validation, we use procedural patent data from the European patent application process. We adopt a one-to-one matching approach, pairing essential patents in telecommunications with control patents on the matching criteria of technology class, filing date and applicant name. Additionally, we compare these essentials with patents from companies that do not hold standards-relevant patents. We detect higher numbers of claims and amendments to claims as well as other relevant characteristics for the essential patents. Using survival analysis, we show that the higher numbers of amendments and claims and the higher share of X references are responsible for higher pendency times, since they significantly decrease hazard rates in the survival analysis. We discuss the general implications for the functioning of the patent system and address the detrimental effects caused by the high degree of uncertainty generated by these filing strategies. Possible solutions such as better co-ordination are devised.

► So-called “essential patents” included in standards have compared to control patents higher number of claims.
► They are also amended more often than the patents of the control group.
► The results have implications for the policies of patent offices.