Archive for November 16th, 2009
I suggest that the companies involved in standards organizations create a company to administer the standard. This standards company would essentially be a licensing and development company. The standards company would also create improvements on the standard and solicit others to contribute their inventions/patents. Outside companies that contributed patents to the standards company would either receive equity or a royalty payment. These standards companies would advance the concept of a secondary market for patents.
Standards organizations (such as IEEE 802.11 for wifi) are commonly formed by a group of companies to define a transmission or interface protocol. The companies agree to pool their patents that are necessary to implement the standard. They also agree to license their patents on a nondiscriminatory basis for a reasonable royalty. Commonly, a company wishing to build a product implementing the standard takes a license to the pool of patents and pays a royalty. The royalty payment is then divided among the companies that contributed patents based on the number and importance of the patents each company contributed.
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