The impact of pool & standard on the patent litigation landscape: A case study of the LED industry

· It is conventionally believed that the formation of patent pool and technology standard mitigates the problem of patent thickets, and therefore reduces patent disputes among industrial players. Our empirical analysis of the ongoing patent dispute landscape of the LED industry seems to suggest otherwise. The formation of patent pool (e.g., LED licensing program) and standard (e.g., LED consortium) did not appear to contain the prevalence of LED patent disputes - the litigation landscape of LED continues to be active. Rather, these patent pooling and technology standardization offer significant advantages to established upstream LED players who can leverage on their large, well-formulated patent portfolios to adjust to industrial changes, and exert effective control over segments of the LED value chain. Further, such a hybrid model that associates the patent portfolio (e.g., pool) and technology standard could improve the overall effectiveness of patent portfolio as to user (licensee) identification and patent valuation. In contrast to the incumbents, downstream LED companies, such as many Asian manufacturers that have limited patent ability, are expected to face increasing challenges in the patent arena. An analytical framework on LED patent portfolio assessment is therefore developed to assist LED players examine their respective patent strengths and accordingly devise their individualized strategies as to R&D, product development, and dispute management.