Intellectual property and standardization committee participation in the US modem industry

The authors take a preliminary look at the interaction between patenting and standardization committee participation in the US modem industry. Both involve a much wider set of firms than the downstream modem manufacturers themselves. Not surprisingly, the two activities are highly correlated across firms. Using five-year periods, Granger causality tests show that while patenting is predicted by participation in earlier standardization meetings, meetings participation is not predicted by earlier patenting. The authors interpret these results as reflecting the timing of standard setting relative to innovation. Introduction The past two decades have witnessed a proliferation of high-tech consumer electronic products which exhibit network effects. Successful diffusion of these products is often contingent on a single product winning a battle of market standards or firms achieving compatibility among competing standards. The benefit to consumers from purchasing a network good depends on the number of other consumers who eventually purchase the same network good, or a compatible one. This situation has two main implications for competition in network markets, with competing standards.