The Market Value of Technology Disclosures to Standard Setting Organizations

In light of the increased demand for interoperability, fragmented ownership of intellectual property and high costs for communicating new technologies, open standard-setting activities emerged as an important coordination and diffusion mechanism. Little is known about the value of contributions to standard setting organizations (SSOs) for technology providers. This paper provides a large-scale empirical assessment of the value of disclosures to SSOs for technology sponsors. Our findings show that disclosures referring explicitly to patents are evaluated positively by the market while this is not the case for blanket disclosures. This indicates that the expected benefits of participating in SSOs outweigh potential disadvantages from making patented technologies available to the market under SSO licensing conditions. The market does not appreciate disclosures to SSOs if there is uncertainty about the associated technologies.