Standardization and Intellectual Property Rights: Conflicts Between Innovation and Diffusion in New Telecommunications Systems

Abstract

In today’s environment of rapidly evolving information and communication technologies (ICTs), technical standardization is said to be confronted by a “minefield” of intellectual property rights (IPRs). Patents and other industrial IPRs that might belong to individual developers of technology have the potential to undermine the collective pursuit of technical standardization that might serve the common interests of the sector or industry. This tension between the individual and the collective, between the development of technology and its diffusion, is however by no means new; it is an inherent feature of standard development as an institution of innovation. The fact that this tension has only recently been converted into conflict raises a host of interesting questions about standardization in the evolving environment of the ‘digital age’. In this chapter, we will address some of these. We are especially interested in the fundamental question concerning the roles of standard development organizations and IPRs in the “technology infrastructure” (Tassey, 1995) and how these roles are “co-evolving” (Nelson, 1995) with the rapidly developing ICT industry. The contention is that this process of coevolution is bringing what are initially complementary functions in the innovation process into increased confrontation. In this chapter such questions will be explored in terms of innovation-theory in which the role this ‘technology infrastructure’ plays is explicitly recognized. The discussion of this relationship moreover will be largely presented in terms of a case study, featuring the controversy that arose during the standardization of the now popular GSM system, produced by the European Telecommunication Standards Institute (ETSI).