Posts Tagged: "Interface Standardization"

Emotions in the debate on royalty payments for the use of standards

The debate on royalty payments for standard essential patents has a surprisingly emotional, sometimes even hostile, undertone. Companies selling standards-based products have an obvious commercial interest in lower royalty rates, but for some participants in the debate the hostility goes deeper. Some people find the idea of having to pay royalties for the use of any standard objectionable and unreasonable.

Inventions Make a Standard Competitive

When a standard faces competition, it is essential to be the first on the market with products and to establish the highest market share. The network effect will make it increasingly difficult for competing standards to get a foothold. Two competing standards will, therefore, be under pressure to gain market share in the early stages of adoption by getting to market first, with superior performance, and with the lowest price. In view of the network effect, getting to market first is usually the highest priority. But in the early stages of adoption, being a little bit later with superior performance is still viable.