Patent Pledges
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Patent Pledges

Global Perspectives on Patent Law’s Private Ordering Frontier

Edited by Jorge L. Contreras and Meredith Jacob

Patent holders are increasingly making voluntary, public commitments to limit the enforcement and other exploitation of their patents. The best-known form of patent pledge is the so-called FRAND commitment, in which a patent holder commits to license patents to manufacturers of standardized products on terms that are “fair, reasonable and non-discriminatory.” Patent pledges have also been appearing in fields well beyond technical standard-setting, including open source software, green technology and the biosciences. This book explores the motivations, legal characteristics and policy goals of these increasingly popular private ordering tools.
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Chapter 13: The informational effects of patent pledges

Clark D. Asay

Abstract

Traditional patent law theories teach that a patent’s rights of exclusion are a patent’s key benefit to the patentee and are necessary to make the patent system work. Yet patentees are increasingly giving away such rights, in whole or in part, as part of a growing phenomenon: patent pledges. In these scenarios, patentees voluntarily commit limit enforcement of their rights. This phenomenon seems to contradict traditional patent law theories. After all, if exclusive rights are necessary, why are patentees increasingly sacrificing some or all of those rights? This chapter argues that they do so because in patent pledging contexts, patents entail a different value proposition than traditional patent law theories posit. That is, patent pledgers use patents as informational tools to signal to the relevant public their development preferences and activities. This information may then facilitate a variety of economic motives behind such pledges. This chapter reviews several patent law features that make patents valuable as informational tools, as well as others that limit their informational potencies. It concludes by assessing some implications of this informational account of patents, in particular with respect to “open innovation.”

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