Standards and Intellectual Property Management Strategy and Policy

Strategic technology standardization and management of related intellectual property have become a worldwide phenomenon. Japan is no exception as stressed in policy documents such as the "Industrial Structure Vision 2010" and the "Intellectual Property Promotion Plan 2011". In the first part of this paper, we construct a framework to analyze strategic standard and intellectual property management, focusing on network effects, switching costs and multi-tasking. We categorize several examples according to conditions such as the position in the vertical market structure (upstream, downstream) and the existence and ownership of complementary goods or technologies. Using the framework, we characterize the economic implications of strategic decisions such as open-closed and pricing. In the second half of the paper, we use a survey of standard and patent lengths to understand the relationship between the length of patent protection and standard longevity. While patent length is legally determined, the life of a standard is determined endogenously by firm strategy and industry interaction. We present a framework to measure the two on a common technology lifetime line and derive policy implications.