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Definitions Edit

Royalty stacking refers to

situations in which a single product potentially infringes on many patents, and thus may bear multiple royalty burdens. The term 'royalty stacking' reflects the fact that, from the perspective of the firm making the product in question, all of the different claims for royalties must be added or 'stacked' together to determine the total royalty burden borne by the product if the firm is to sell that product free of patent litigation."[1]

Royalty stacking is a

[m]arket failure that may result when owners of complementary patents do not coordinate the royalties that they request for the use of their patents. If royalty stacking occurs, the sum of the individual payments requested by the different patent owners is higher than the payment that a single firm would have requested if it owned all the complementary patents.[2]

References Edit

  1. Mark A. Lemley & Carl Shapiro, "Patent Holdup and Royalty Stacking," 85 Texas L. Rev. 1991, 1993 (2007).
  2. Licensing Terms of Standard Essential Patents: A Comprehensive Analysis of Cases, at 8.

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