Brian J. Love (Santa Clara University School of Law) & Christian Helmers (Santa Clara University) have posted An Empirical Test of Patent Hold-Out Theory: Evidence from Litigation of Standard Essential Patents on SSRN. Here is the abstract:
The theory of patent “hold-out” posits that frictions in the market for licensing standard-essential patents (SEPs) provide incentive for prospective licensees to opportunistically delay taking licenses with the goal of avoiding or reducing royalty payments. We derive empirically testable predictions from the literature supporting hold-out theory—namely that hold-out should be positively associated with the size and international breadth of licensors’ SEP portfolios, but negatively associated with enforcement uncertainty associated with a licensors’ SEPs—and we test those predictions using measures of pre- and in-litigation hold-out constructed from information disclosed in U.S. cases filed 2010-2019. Relying on both SEP and a matched control set of non-SEP disputes, we find some evidence of an association between hold-out and both SEP portfolio size and enforcement uncertainty; however, we find no evidence associating pre- or in-litigation hold-out with the international breadth of SEP rights.
