Abstract
In this article, we analyze the remedies that should be imposed when an intellectual property owner fails to disclose its holdings to other participants in a standard-setting organization (SSO). We show how nondisclosure can lead to supracompetitive royalty rates, different standards from those under full disclosure, or both. We then explain why royalties must be set below those that would have prevailed under full disclosure to account for the fact that punishment is not certain and remedies are often imposed only prospectively. We also explain why even lower royalty rates may be needed when standardized technologies can be improved over time. We apply our analysis to the remedies sought by the Federal Trade Commission and the commitments obtained by the European Commission in response to allegations that Rambus Inc., a developer and licensor of DRAMs, had failed to disclose its intellectual property holdings to JEDEC, an SSO.
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