Understanding the Architectural Control of Opened Complex Systems under Cooperative Standardization

Abstract

Drawing on the case of the mobile telecommunication sector, the article attempts to elucidate why and how leading firms can control opened technologies of complex systems under cooperative standardization. Different from the case of a proprietary standard by a leading firm, even leading firms can hardly control complex systems of technologies opened under cooperative standardization. Cooperative standardization and related patenting can widely cause technology spillover from leading firms to others including new entrants. However, at the same time, such spillovers are presumed to increase leading firms’ control over technologies, architectural control, in the sector concerned. We conduct a longitudinal network analysis of patent citations by proprietary patents (Non-SEPs) from standard essential patents (SEPs), which are declared as essential for the implementation of technology specifications to product systems. The data shows that even though the technology development and standardization become conducted more dispersively by a variety of firms, the networks of SEP citations have increasingly converged upon a few leading firms. While declaring a number of SEPs with causing technology spillovers, such leading firms have outstandingly accumulated system knowledge covering and interrelating multiple technology domains. The finding reveals that system knowledge as well as the number of patents (SEPs) helps firms nurture and preserve architectural control to drive technology development and innovation even under an open technology environment.