Interaction between standardisation and intellectual property rights

The primary objective of the conducted study was to achieve a good understanding of the relationship between standardisation and intellectual property rights (IPR). Based on these insights, recommendations can be derived in order to improve their interface.
The generation of new knowledge, inventions, their transformation into innovation and their widest possible diffusion, together with the attempt to prohibit parallel development, are considered to be essential factors for economic growth. Knowledge as such, however, is intangible and has the feature of a public good. Nonexcludability of others from the use of produced knowledge makes it difficult for a knowledge-producer to recoup her/his expenditure on research and development (R&D). Intellectual property rights, covering patents, trademarks and copyrights, and standardisation are both tools for knowledge creation and diffusion. The ways their influence work, however, are quite ambivalent. This ambivalence of intellectual property rights and de facto industry standards or de jure standards for technological development is triggered off by two different economic mechanisms.
Intellectual property rights (IPR) provide knowledge-producers with the temporary right of the exclusive exploitation of the benefits deriving from the new knowledge. In this way, IPR supply knowledge-producers with the publicly desirable incentive to invest in R&D. IPR, however, are only a second best solution. Firstly, they provide holders with a temporary monopolistic position, possibly causing negative effects on competition in the long run. Secondly, IPR influence the diffusion of knowledge. Some IPR, like patents, include a positive element of diffusion by publication of the right. In general, however, the restraint on the free flow of ideas and knowledge by IPR dominates. Potential users can either not gain access to required knowledge or have to pay for it via licensing.
In contrast to IPR, formal standards published by standards development organisations (SDOs) are decisive for the diffusion of new technologies. They not only make information about new technologies available to everyone, but also allow the use of this technical information in production processes or products for a small fee, and come near to being a classical public good. Participants of standardisation processes also have an intrinsic incentive to create knowledge within a standard document. The knowledge created through a standardisation process is different from private closed knowledge creation processes, since different actors contribute to the final output. And the added value being created can be interpreted as the coordination of the different inputs and the broad acceptance achieved for the final output, the standard document.




IPR, Patents, R&D, Standards

Additional information:

AuthorsBlind, Knut, Thumm, N., Iversen, E., Hossain, K., Van Reekum, R., Rixius, B., Bierhals, R., Sillwood, J.
Publisher:European Commission
Keywords:IPR, Patents, R&D, Standards
Last update:2004