Intellectual property rights, strategic technology agreements and market structure : the case of the GSM

This paper investigates the role of intellectual property rights (IPRs) in shaping the GSM industry. This industry is an example of a high-tech industry in which standards play a large role. In the process of designing the GSM standard, a lot of attention has been given to IPRs, mainly to avoid a situation in which a single IPR holder could hamper or even totally block the development of the standard. Nevertheless, the ultimate GSM standard contains a large amount of so-called ‘essential IPRs’, i.e., IPRs without which the implementation of GSM products is impossible. The paper starts with a general discussion of the development of GSM, and the role of firm strategy and IPRs in this process. Next, we present a database on the essential IPRs in the GSM standard. This database has been compiled on the basis of international patent statistics, and the data that manufacturers have supplied to ETSI, the European standardization body responsible for defining the GSM standard. We use this database to assess the dynamic IPR position of firms in the original GSM standard and its subsequent development. In a next part of our analysis, we relate the firm’s IPR position to the trends in strategic technology agreements in the mobile telecommunications field. We ask the question whether firms that are powerful in terms of IPRs are also the firms that are ‘central’ in the technology agreements network (or vice versa). We also investigate whether developments over time in the technology agreements data follow from the dynamic movements in the IPR position of a firm, and which other factors play a role in this.