Essential patents in industry standards : the case of UMTS

We study the determinants of essential patents in industry standards. In particular, we assess the role of two main factors: the significance of the technological solution contained in the patent and the involvement of the applicant of the patent in the standardization process. To this end, we examine the case of UMTS, one of the most successful standards in the area of mobile telecommunications. We compare the patents claimed essential for the UMTS standard with a group of randomly selected control patents covering the same time frame and technology classes. We establish that both the technological significance of the patent (measured using forward citations) and the applicant’s involvement in the standardization process have a positive effect on the probability that a patent will be claimed as "essential". On the basis of our findings, we offer policy recommendations