Uncertainty about the essentiality of patents stimulates firms to bring weak patents to standards as shown by Dewatripont and Legros (2008). Particular licensing rules, such as “numeric proportionality” can make problems with multiplicity of trivial and non-valuable patents in standards even worse (Layne-Farrar, Padilla and Schmalensee, 2006). These findings suggest that both the rules for inclusion of patents and the regulation of compensation to IPRs incorporated in standards are potentially of great importance.Dewatripont and Legros (2008) suggest that better filtering in the process of granting patents is important for the efficiency of technological standards in order to mitigate the problems with uncertainty and rent-seeking. This argument is vaguely related to Khan’s (2005) more general finding that the introduction of the patent examination system during the 19th century reduced the relative number of patent lawsuits and that this substantially spurred inventive activity.
It seems reasonable to conclude that the compensation to patent-holders should be related to the value of the patents and not merely to the number of patents. Quality is arguably more important than quantity when it comes to innovation.
