Tracing the Evolution of Standards and Standard-Setting Organizations in the ICT Era

Marquette Intellectual Property Law Review Volume 24 Issue 2 Article 5 Summer 2020 Tracing the Evolution of Standards and Standard-Setting Organizations in the ICT Era Follow this and additional works at: https://scholarship.law.marquette.edu/iplr Part of the Antitrust and Trade Regulation Commons, Constitutional Law Commons, Intellectual Property Law Commons, and the Science and Technology Law Commons Recommended Citation Manveen Singh, Tracing the Evolution of Standards and Standard-Setting Organizations in the ICT Era, 24 Marq. Intellectual Property L. Rev. 217 (2020). This Article is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. It has been accepted for inclusion in Marquette Intellectual Property Law Review by an authorized editor of Marquette Law Scholarly Commons. For more information, please contact . SINGH_MACRO.DOCX (DO NOT DELETE) 2/8/21 2:48 PM TRACING THE EVOLUTION OF STANDARDS AND STANDARD-SETTING ORGANIZATIONS IN THE ICT ERA MANVEEN SINGH* I. INTRODUCTION ........................................................................................... 218 II. THE EVOLUTION OF STANDARDS.............................................................. 219 A. Historical Background ................................................................... 220 B. Types of Standards ........................................................................ 222 1. De Jure Standards ................................................................... 223 2. De Facto Standards ................................................................. 223 C. Benefits of Standardization............................................................ 224 1. Greater Interoperability ........................................................... 225 2. Better Network Effects ............................................................ 225 3. Higher Rates of Innovation ..................................................... 226 III. STANDARD-SETTING ORGANIZATIONS ................................................... 227 A. The Evolution of SSOs .................................................................. 227 B. Structure and Legality.................................................................... 230 1. A Classic Corporation ............................................................. 230 2. A Limited Liability Corporation ............................................. 230 3. A Semi-Autonomous Entity .................................................... 231 4. A Non-Incorporated Entity ..................................................... 231 IV. THE STANDARDS DEVELOPMENT PROCESS ............................................ 233 A. The IEEE Model ............................................................................ 234 B. The ETSI Model ............................................................................ 235 V. CHALLENGES ASSOCIATED WITH STANDARD-SETTING AND STANDARDSETTING ORGANIZATIONS .................................................................. 236 A. Patent Hold-Up .............................................................................. 236 B. Patent Hold-Out ............................................................................. 237 C. Royalty Stacking ............................................................................ 237 D. Patent Ambush............................................................................... 238 VI. CONCLUSION ........................................................................................... 239 * Dr. Manveen Singh is an Associate Professor and Associate Dean at Jindal Global Law School SINGH_MACRO.DOCX (DO NOT DELETE) 2/8/21 2:48 PM 218 [Vol. 24:2 MARQ. INTELL. PROP. L. REV. I. INTRODUCTION Standards and standard-setting organizations (SSOs) have played a crucial role in shaping the innovation landscape for over three decades, especially in the information and communication technologies (ICT) sector.1 The advancement in mobile telecommunication and the Internet has led to a fundamental change in the way individuals communicate with each other.2 Devices such as smartphones, tablets, laptops, and smart watches bear complex mechanical and technological features3 and perform multiple functionalities by connecting seamlessly.4 However, in order for the interoperability of these devices and their functionalities to come through, there is a requirement of a common set of specifications and interfaces, in the form of standards.5 Standards are widely acknowledged to be the mainstay of modern economy6 and can lead to an increase in the value of consumer products, as well as increased rates of innovation.7 The setting of standards and commercializing of innovation at large is facilitated by voluntary associations called SSOs. Competing firms come together under the auspices of SSOs8 to collaboratively select and adopt uniform technical standards.9 It is worth noting that the benefits brought about by these standards have a greater visibility in the ICT sector, primarily on account of two reasons. First, in order to make complex technologies work, there is a 1. James J. Anton & Dennis A. Yao, Standard-Setting Consortia, Antitrust and High-Technology Industries, 64 ANTITRUST L.J. 247 (1995). 2. Haris Tsilikas, Collaborative Standardization and Disruptive Innovation: The Case of Wireless Telecommunication Standards, MAX PLANCK INST. FOR INNOVATION & COMPETITION, no. 16– 06, 2016, at 3 (citing Wolfgang Bock et al., The Mobile Revolution: How Mobile Technologies Drive a Trillion-Dollar Impact, BOSTON CONSULTING GROUP (Jan. 15, 2015), https://www.bcg.com/enin/publications/2015/telecommunications-technology-industries-the-mobile-revolution (last visited May 18, 2016)). 3. Olia Kanevskaia, Technology Standard-Setting Organizations and their Capture by the Principles of Global Administrative Law, 3 E-PÚBLICA, no. 3, 2016, at 136. 4. Tsilikas, supra note 2. 5. Id. 6. OECD, Intellectual Property and Standard Setting, ¶ 4, OECD Doc. DAF/COMP/WD(2014)116 (Dec. 8, 2014), http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DAF/COMP/WD(2014)116&doclanguage=en. 7. Joanna Tsai & Joshua D. Wright, Standard Setting, Intellectual Property Rights, and the Role of Antitrust in Incomplete Contracts, 80 ANTITRUST L.J. 157, 159 (2015). 8. Tsilikas, supra note 2, at 4. 9. Patrick D. Curran, Standard-Setting Organizations: Patents, Price Fixing, and Per Se Legality, 70 U. CHI. L. REV. 983 (2003). SINGH_MACRO.DOCX (DO NOT DELETE) 2020] EVOLUTION OF STANDARDS IN ICT ERA 2/8/21 2:48 PM 219 requirement of hundreds of thousands of patents.10 Second, there is a strong need for devices and networks to interoperate in the ICT sector, which makes it absolutely necessary to develop common technical standards.11 SSOs are further tasked with the responsibility of fostering a regime of rapid technological innovation12 by balancing the interests of their members; their membership (...truncated)