Abstract
We analyze the effect of a fundamental structural technological change in the telecommunication industry on telecom operators. The technological change pushed operators away from basic analog voice transmission to complex digital data transmission technology. We show that this recent change confronts operators with an enormous challenge because technologies for digital data are notorious for their complex patent landscape characterized by standard essential patents, patent thickets, litigation, and cross-licensing. We show that operators have fundamentally changed their patenting behavior, increasing filings on technologies for digital data almost fourfold over the past decade. Our results indicate that operators were most likely to patent in technologies most severely affected by the complexities of the patent landscape. While operators were so far on the sidelines on the global patent wars, our results suggest that they might soon see themselves embroiled in patent related disputes.
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