John Liebovitz Feedback Notes
Excerpts from email from John, 6/10/2009
Read it quickly (will give a second read later). It's good.
In the patents section I would note that although cross-licensing creates an innovation commons among parties to the patent pool, it also potentially creates a barrier to entry to new companies. This ought to have an effect on equipment industry structure, though what exactly requires more thought. (Probably a reason for large systems-integrator-ish suppliers.)
It would be good to further explore the topic of how industry concentration correlates (or not) with over the top innovation. Ironically, wireline is more concentrated than wireless yet has less vertical control issues (for now) with regard to over-the-top internet services (though perhaps not the total services pie, i.e., pay TV is still very much a closed world).
My response:
"In the patents section I would note that although cross-licensing creates an innovation commons among parties to the patent pool, it also potentially creates a barrier to entry to new companies. This ought to have an effect on equipment industry structure, though what exactly requires more thought. (Probably a reason for large systems-integrator-ish suppliers.)"
This is something Yochai is very interested in. His favorite example is the old RCA patents (where, as I understand it, a small number of radio companies basically formed a cartel through cross licensing the key radio patents). There's only a sentence or two on the issue in the paper now, though, because I couldn't quickly find a specific modern example where cross-licensing practices clearly inhibited a new entrant. GSM might be one -- Motorola was apparently very restrictive in their willingness to license key GSM patents. But I'd need to read up on that story more to find some evidence of harm. Any specific, clear examples jump to mind? Do you think this is a pervasive effect in the industry, or a problem limited to a specific set of standards or technologies?
John's response, 6/11/2009
GSM might be an example. FYI there has been a lot of talk recently about an LTE patent pool, but obviously premature to conclude any market effects.
On the scale of closed--open in wireless you have: iDEN (Motorola controlled), CDMA (Qualcomm owns most of the patents), GSM / TDMA (probably more open).