Consumer electronics have always been a big draw during the holiday shopping season, and the deep discounts offered on Black Friday and Cyber Monday have only extended this trend. But as stores compete and consumers delight, few may be aware of the foundational role patent licensing strategies play in this seasonal phenomenon.
Technology manufacturers have traditionally been among the most active participants in the worldwide patent system. According to PC Advisor, computer manufacturers and supply chain partners were a big reason why global patent applications topped 2 million for the first time ever last year. While news headlines would suggest these companies are often locked in tight competition, some of their most powerful products have actually come as the result of strategic cooperation.
In a guest column for the Huffington Post, technology attorney Christina Gagnier drew attention to an often overlooked mechanism known as MPEG-2. Established in 1996, this innovation pool allowed consumer electronic companies to contribute and license patents at will for inclusion in many of the products which today's consumers now take for granted.
However, the key point of distinction has been the reevaluation of licensing rates as patents approach their expiration dates. According to Gagnier, similar MPEG offshoots have lost sight of this point in recent years, attempting to lock in revenue streams with standard rates. If this practice takes precedence, shoppers could feel the effects as consumer electronics manufacturers are forced to fix their price points even as a product's components become less valuable over time.