MMRCDISCUSSION PAPER SERIES

No. 465

Investigating Firms’ Knowledge Management in The
Standardization: The Analysis of Technology
Specification-Declared Essential Patent Networks on
Telecommunication Industry
Shiu, Jing-Ming
Manufacturing Management Research Center,
Faculty of Economics, The University of Tokyo
Yasumoto, Masanori
Graduate School of Environmental and Information Sciences,
Yokohama National University
January 2015

東京大学ものづくり経営研究センター
Manufacturing Management Research Center (MMRC)
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Investigating Firms’ Knowledge Management in Standardization: The Analysis of the Networks ofTechnology Specifications and Declared Essential Patents on the Telecommunication Industry

SHIU Jing-Ming
Project Researcher
Manufacturing Management Research Center
Faculty of Economics, The University of Tokyo

YASUMOTO Masanori
Professor
Graduate School of Environmental and Information Sciences
Yokohama National University

Abstract
Drawing on the case study of the telecommunication industry, we attempt to develop the debates on
the condition to secure standard setters’ competitive advantage under the diffusion of standardized
technologies. Standardization helps standard setters profit from leading the industry while
encouraging new competitors without sufficient knowledge to enter the industry to undermine
standard setters’ competitiveness. In such an environment, standard setters are required to conduct
strategic knowledge management to secure their advantage. By conducting network and quantitative
analyses on standard setters’ technology specification and declared essential patent data, we found thatleading standard setters built interrelated networks of various technology specifications and declared
essential patents. The results showed that such leading standard setters did not separately pursue
various fields of technology specifications and declared essential patents, but rather controlled theinterdependencies between these fields of technology specifications and declared essential patents
centering on a few critical technology fields. The results will help both academia and practitioners
better understand how leading standard setters can manage their knowledge in face of standardization.

Key Words: knowledge management, standardization, appropriability, diffusion, networks,
architectural (systemic) knowledge

11. Introduction
In many industries, leading firms as standard setters attempt to reflect their technologies on theindustrial standards while collaborating with other standard setters based on the “consensus principle”
to establish various technology specifications in consortiums (Sanders, 1972; Vernan, 1973; Katz andShapiro, 1985; Farrell and Saloner, 1988). Setting technology specifications can help standard setterswith sufficient proprietary knowledge not only enjoy the benefits from the standardization (e.g.,market expansion, network externality, scale merit) but also lead the industry concerned (e.g.,technological and time-based advantages).
However, setting technology specifications also induces non-standard setters without sufficientknowledge to enter the industry and enjoy the benefits of knowledge codification conducted bystandard setters (West, 2003; Simcoe, Graham, Feldman, and Maryann, 2009). In such an environment,
leading firms as standard setters are required to secure their advantages against non-standard setters byconducting strategic knowledge management for their standardization activities.
Standard setters are presumed to have two ways to secure their advantage: (1) protecting theiradvantages by exploiting their intellectual property rights tied up with standardization activities (e.g.,Blind, Edler, Frietsch and Schmoch, 2006) 1 and (2) leading industrial technologies and productdevelopment by incorporating their technologies into standardized technology specifications (e.g.,Funk, 2002; 2009). Antecedents primarily pay attention to the first way (1) suggesting that standard
setters adopt patent strategies in accordance with different phases of standardization (Bekkers, 2001;
Bekkers, Bongard and Nuvolari, 2009; Bekkers, Duysters and Verspagen, 2002; Bekkers and Liotard,
1999; Bekkers and Martinelli, 2010; Bekkers, Verspagen and Smits, 2002; Bekkers and West, 2006).
These studies regard patents as firms’ property rights to “appropriate” their technologies instandardization instead of discussing how standard setters should conduct their knowledge
management in determining critical technology specifications in consideration of technology diffusion.
As for the second way (2) regarding our main concern, standard setters will enable standardized
technology specifications to work better on standard setters’ proprietary systems and thereby enjoy theadvantage of product development faster than non-standard setters (Funk, 2002; 2009). In that case,standard setters can declare their patents to certain technology specifications under FRAND (Fair
Reasonable And Non-Discriminatory) license terms in order to avoid non-standard setters’
1

Patent strategies, securing the appropriability of technologies, can explain firms’ competitive advantages. As

Granstrand, Patel and Pavitt (1997) mentioned, how diverse the overlap is between a firm’s patent portfolio can be
regarded as a technology diversification, which bears the opportunities to introduce new technologies into products andsystems for improved performance and new functionalities. It is still not well-known that how firms can pursue theirtechnology diversification accompanying with standardization. We think that this is also an important future research
topic for revealing how firms should acquire knowledge from standardization to diversify their technologies.

2

infringement on their proprietary knowledge.
Previous studies suggest that organizational capabilities to secure firms’ competitiveness can befound in systemic knowledge management rather than the pile of technological elements (e.g., Clarkand Fujimoto, 1991; Henderson and Cockburn, 1994; Henderson and Clark, 1990; Iansiti, 1997). Sucha systemic perspective makes us infer that standard setters would attempt to manage the configurationof their diverse element technologies in harmony. Drawing on this perspective, this study sheds lighton the “intra-firm” status and transition of standard setters’ knowledge relevant to technology
specifications with declared essential patents. In this study, we explore how standard settersorchestrate both technology specifications and declared essential patents by examining quantitative
data on technology specifications and declared essential patents released from 3GPP (Third
Generation Partnership Project), ETSI (European Telecommunications Standards Institute), andEspacenet (the database of the European Patent Office).
The study is constructed as following. First, we reviews antecedents related to the knowledge
management of firms engaged in standardization in order to draw our research questions. Next, wedevelop the framework to show the research focus and the methodology to understand standard setters’
knowledge management. Following these sections, we examine major standard setters’ knowledge
management by using the network analysis on the quantitative data of technology specifications anddeclared essential patents proposed by standard setters, and discuss the results. Lastly, the conclusion
comes with the implications, limitations and future researches.

2. Survey
Standardization activities are known as an alignment mechanism in which firms negotiate with eachother to decide the direction of technology development (Bekkers and Martinelli, 2010; Bekkers andMartinelli, 2012; Fontana, Nuvolari and Verspagen, 2009). In standardization, technology
development tends to be incremental in nature and generally occurs around well-established technicaldesigns in order that adequate levels of compatibility are maintained (Antonelli, 1992: p. 12). Oncestandardized product systems and/or technologies are well-accepted, any technology changes or
improvements will reflect existing standardized technology specifications of these product systems
and/or technologies (Leiponen, 2008; Leiponen and Bar, 2008).
Yet, in many cases, important aspects (i.e., connotations) of standard information are not clearly
described in specific technology specifications but instead be written “between the lines” (Funk, 2002)
and only well-understood through specific working groups of standardization activities. By
contributing their efforts to standardization in a consortium, standard setters could acquire valuable
technology information through working groups of standardization, which helps to complete productdevelopment faster than others (Funk, 2002; 2009). As Funk mentioned, firms attending3

standardization activities in a consortium can achieve high performances and stabilities within shortdevelopment lead times by acquiring broader technology knowledge through the consortium. Thus,
one of the most critical purposes of attending in standardization activities is to get information andknowledge regarding to technology changes on modified technology specifications earlier than othercompetitors.
However, we have to notice that there exist collaborative, non-competitive, interests as well ascompetitive interests in technology specification settings (Leiponen, 2008; Leiponen and Bar, 2008).
Firms collaborate with each other to set technology specifications in order to achieve common
benefits: typically market expansion through the diffusion of common standardized technologies.
Since setting technology specifications induces knowledge codification which causes non-standard
setters without sufficient knowledge to enter the industry concerned. Under such situation where newentrants can threaten standard setters, standard setters have incentives to declare their essential patents
as intelligent property rights rewarding for their contributions to setting technology specifications.
Leiponen (2008) and Leiponen and Bar (2008) indicate that it is important for standard setters toembed themselves into superior alliance networks so that their patents can be incorporated into
technology specifications. Also Bekkers, Bongard and Nuvolari (2009), echoed with Leiponen (2008)
and Leiponen and Bar (2008), reveal that both the technological significance of patents and applicant
involvement in standardization process have positive effects on the probability that the patents can beclaimed as essential.
In the sense, the interrelationship between technology specifications and declared essential
patents should be considered with regard to standard setters’ participation in standardization activities(Blind and Thumm, 2004). In the line of studies, firms’ patent strategies in standardization are
regarded as critical parts of their knowledge management. Many studies presume that standard setters’
patent strategies aim to “appropriate” their technologies to themselves in order to preserve their rights
to reward for their contributions to the standardization (Bekkers and Liotard, 1999; Bekkers, 2001;
Bekkers, Duysters and Verspagen, 2002; Bekkers, Verspagen and Smits, 2002; Bekkers and West,2006; 2009; Bekkers, Bongard and Nuvolari, 2009; Bekkers and Martinelli, 2010; Bekkers andMartinelli, 2012; Garrard, 1998; Granstrand, 1999; He, Lim and Wong, 2006). Relying on thepresumption, past studies primarily pay attention to firms’ behaviors regarding patents, particularly
focusing on how to extract most benefits from their scope of patents (Blind, Edler, Frietsch andSchmoch, 2006; Hall and Ziedonis, 2001). However, standard setters face the dilemma between theadvantages by the appropriability of technologies and the benefits from the diffusion by thestandardization of technologies (Blind and Thumm, 2004; Simcoe, Graham, Feldman, and Maryann,2009; West, 2003). The inner logic, more specifically intra-firm knowledge statuses and transitions, ofstandard setters to cope with the dilemma is still blurred. In other words, it is less known how firms

4should conduct knowledge management for sustaining their advantages while participating instandardization activities.
The dilemma for standard setters poses a question on standard setters’ knowledge management:
how standard setters can sustain their competitive advantage in knowledge management in spite of the
diffusion of their knowledge, as codified knowledge, through standardization. The explanation to thequestion is expected to elucidate standard setters’ knowledge management to cope with technology
specifications while appropriating their property rights to themselves in standardization.

3. Framework and Focus
In this section, we propose our framework and research focus defining the characteristics ofknowledge relevant to standardization. It is known that firms’ knowledge management needs to takethe different periods of standardization into account (Van de Ven and Garud, 1994; Rosenkopf andTushman, 1998). In the pre-standard discussion phase, firms are required to establish generalknowledge regarding to the principle characteristics of the product system concerned. In
standardization phase, it is necessary for firms to construct their specific knowledge in accordancewith different types of detailed technology specifications (Bekkers and Liotard, 1999; Granstrand,
1999, p. 204; Bekkers, Duysters and Verspagen, 2002; Bekkers, Verspagen and Smits, 2002).
Particularly in the development of CoPS (Complex Product Systems), like telecommunication
system (Davies, 1996; Davies, 1999; Davies and Brady, 2000; Miller, Hobday, Leroux-Demers andOlleros, 1995; Hobday, 1995; Hobday, 1998; Hobday, 2001), firms need to integrate and combine
different domains of knowledge (Brusoni and Precipe, 2001; Brusoni, Precipe and Pavitt, 2001)
through specific “integrated problem-solving” (Nelson and Winter, 1982; Tushman and Anderson,
1987; Christensen, 1997). According to such a nature of the development of CoPS, standard setters instandardization are presumed to integrate diverse knowledge, which is dispersed across “technology
specifications” and “declared essential patents,” resting on systemic knowledge specific to standard
setters. Firms’ competitiveness can be secured by their architectural, systemic, knowledge rather thanelement technologies such as patents (Henderson and Clark, 1990; Henderson and Cockburn, 1994).
Therefore, standard setters are expected to build their advantages with systemic knowledge to deal
with complex technological interdependences and compatibilities faster than others (i.e., non-standard
setters).
Drawing on this systemic perspective, this study examines standard setters’ knowledge
management by understanding the statuses and transitions of the interdependencies between“technology specifications” and “declared essential patents,” which are considered as the operationalvariables of knowledge in past studies on standard-related patent strategies. It is widely recognizedthat patents are taken for granted for protecting participants’ rights rewarding for their contributions to5standardization. Patents, essential patents, declared for technology specifications are called SEPs
(Standard Essential Patents). SEPs are based on FRAND (Fair, Reasonable, And Non-Discriminatory)
license terms to give rights to standard setters to prevent non-standard setters from infringing (i.e.,
free-riding) on standard setters’ rights (e.g., illegal production, sell, import, use and/or operation of
products).
Yet, as shown in Figure 1, when firms participate in standardization, there have two different
knowledge boundaries which should be taken into account. The left side interprets standard setters’
proprietary knowledge domain, which includes “proprietary patents (i.e., patents published throughcountry patent offices),” “declared essential patents” and “technology specifications.” On the contrary,
the right side represents standardized knowledge, composed by “proprietary patents,” “technology
specifications” and “declared essential patents,” which allow non-standard setters to acquire
knowledge necessary for their product developments based on the standard.

Figure 1. Relationships between Declared Essential Patents andTechnology Specifications in Firms’ Knowledge

The intersection part between standard setters’ and non-standard setters’ knowledge boundaries iscreated by standard setters in standardization. In this intersection part, standard setters are involved instandardization activities to create technology specifications for diffusing their technologies while
declaring their essential patents relevant to those technology specifications against non-standard
setters’ infringement on their knowledge. It is vital for standard setters to conduct their patent6

portfolios compatible to diffusible technology specifications in the product system concerned(Carlsson and Stankiewicz, 1999). The interdependencies between technology specifications anddeclared essential patents in each of standard setters are presumed to indicate the statuses of systemic
knowledge to bridge between the appropriability and diffusibility of standard setters’ knowledge. Suchinterdependencies will help us explicate standard setters’ knowledge management in standardization.
Therefore, we take the networks of technology specification and declared essential patents as aninterdependent interfaces of two knowledge boundaries which standard setters need to focus on. In
particular, the more complex a product system is, the more difficult it is for standard setters to set
essential patents corresponding to technology specifications in the manner of one-to-one relationships.
That means, particularly in the case of CoPS, standard setters are required to deal with highlyinterdependent relationships between technology specifications and declared essential patents.
Otherwise, standard setters can neither make their product systems acceptable in the market by welldefined technology specifications nor consolidate their advantages of product development prior to
non-standard setters.

4. Methodology and Data
The standardization in the telecommunication industry can be a proper case to elucidate standard
setters’ knowledge management to sustain their advantages of product development. As used in many
previous studies (e.g., Bekkers and Liotard, 1999; Bekkers, Duysters and Verspagen, 2002; Bekkers,
Verspagen and Smits, 2002), the data of technology specifications and declared essential patents in thetelecommunication industry are officially provided in a reliable manner (as described later). Thus, thisstudy takes the 3GPP standardization as an informative case for the quantitative and qualitative study
to explore the networks of technology specification and declared essential patents.
In the telecommunication industry, 3GPP was spun out of ETSI in 1998 and began operations in
2000, inherited most of its operating procedures from ETSI and, as a result, retained their approach toopen membership, intellectual property provisions, committee structure, and working procedures.
Since most standard setters which had developed their own 2G GSM products decided to continuechoosing the 3G UMTS technologies to develop their products, it is reasonable for them toconcentrate on 3GPP. Yet, we exclude the 3GPP2 standardization in our analysis. This is because that
3GPP2 was mainly initiated and managed by Qualcomm, which aimed at the standardization for 3G
CDMA2000.
Our study used technology specifications and declared essential patents as proxy variables to
depict standard setters’ standardization activities in terms of their knowledge management. Because
these technology specifications and declared essential patents contain many technical descriptions, wefirst started understanding these information from a systematic review of technical literatures, trade7

publications, specialized engineering journals, company annual reports and publications. These data
providing background information were used to sketch the overall picture of the sectors analyzed inthis study. We also conducted many semi-structured interviews to acquire qualitative insights forunderstanding the importance of standard setters’ knowledge management interplaying between
technology specifications and declared essential patents in the telecommunication industry.
Afterwards, we downloaded the technology specification database from the 3GPP website on 20
December, 20092. This database contains 6,243 “Technology Specifications” and 112,386 “Change
Requests” from 15 April, 1988 to December, 20093. In order to keep the reliability and conformity ofthe database, we also wrote an email to confirm with John M Meredith, the 3GPP Specifications
Manager, ETSI, that this database did contain all the technology specifications and change requests
for the time periods above4.
The 3GPP technology specification database has its specific format. Therefore, we also referredto the “Third Generation Partnership Project: 3GPP Working Procedures”5 and the “3GPP TR 21.900
V7.2.0 (2006-06) 6 “ to clarify the process of technology standardization and deal with the 3GPP
specification database. The most valuable variable in this database is the data of “rapporteurs” that canhelp clarify who the authors of technology specifications are7. Moreover, rapporteurs receive change
requests and maintain the level of completion and stability of technology specifications. Finally, we
found there were 50 and 87 companies attended respectively in the 2G GSM and 3G UMTS
standardizations8.

2

Source from: http://www.3gpp.org/ftp/Information/Databases/Spec_Status/3GPP-Spec-Status.zip

3 In our research, we grouped 2G GSM, 2.5G GPRS and 2.75G Edge into “2G GSM” and 3G UMTS, 3.5G HSDPA

and 3.75G HSUPA into “3G UMTS” for more reasonable calculation.
4 The reply of John M. Meredith was “Releases up to Rel‐8 are complete, other than for essential corrections (stillquite a lot in the case of the most recent Release, Rel‐8). Release 9 is still under development, and most of its
specs will not be created until after the freeze date, currently envisaged as December 2009. Release 10
development has only just begun. By the way, take no notice of the Release called “UMTS”; this was the early
investigation work done on the 3rd Generation system by ETSI TC SMG between 1992 and 1998. All those
documents are effectively archived. The status data is completely up to date. The date named in the file “2001‐
11‐28_flat‐table‐for‐flat‐earthers” is the date the queries were written, and are named thus for cataloguing
purposes. That date has nothing to do with the date of the data contained in those tables, which is as fresh as thetimestamp on the dbf file !”5

Downloaded from http://www.3gpp.org/ftp/Information/Working_Procedures/3GPP_WP.pdf

6

Downloaded from http://www.qtc.jp/3GPP/Specs/21900-720.pdf

7

We also grouped a firm and its affiliates into one company for the purpose of calculation. For example, we put Nokia

UK Ltd, Nokia Siemens Networks, Nokia Corporation, Nokia Japan Ltd, Nokia Mobile Phones, Nokia Research Center,Nokia Communications, and Nokia Telecommunication Inc. into “Nokia.”
8

The kurtosis and skewness in the described statistics signify that both the 2G and the 3G technology standardizations

8In order to precisely clarify how each firm’s technology specifications were positioned in terms of
the architecture of telecommunication system, we interviewed 5 software engineers and 7 hardware
engineers from one of the Taiwanese mobile phone ODM, so that we could categorize technology
specifications with 5 levels represented as “Service and Technical Issues, Requirements and Plans,”“Core Network and Intra Fixed Network,” “Air Interface,” “Mobile Phone” and “Security Algorithm”(Table 1). When a technology specification covered two or multi levels, we asked the interviewees todecide which level was the most suitable for the technology specification concerned.

Table 1 Technology Specifications Categorized by Architecture of Telecommunication System(Source from http://www.3gpp.org/specifications/specification-numbering, categorized by authors)

First, we used change requests of 3GPP to reveal how frequently technology specifications werechanging from the 2G GSM to the 3G UMTS standardizations. In the sense, we further inferred which
standard setters contributed more efforts to which parts of technology specifications oftelecommunication system. According to “Categories of Change Requests on P.16 of 3GPP TR
21.900 V7.2.0 (2006-06),” there were the A, B, C, D, E and F categories of change requests9. We only
chose change requests belonging to the B and C categories for our analysis. This is because the B
category represents new technology functions updated and the C category represents existing
technology functions modified, respectively. Finally, we excluded 4,282 unclear change requests andwere controlled by certain companies. That is to say, in the technology standardization, the top 5 companies in the fieldowned 59.55% and 61.84% of the totals of the 2G and 3G technology standards, respectively.
9

The E category had not been used, the A category was used for modifying and updating pre-version technology

specifications, and the D and F categories were used to modify typo mistakes of existing documents.

9those change requests belonging to the E category, and obtained 108,104 available change requests forour analysis. Afterwards, we analyzed the 2G GSM and 3G UMTS technology specifications tounderstand which standard setters had which sorts of knowledge corresponding to various technology
specifications categorized by the architectural of telecommunication system.
Next, we also downloaded the worldwide declared essential patent database from the ETSI
website in December, 201210. This database contained 64,228 declared essential patents from 1990 to
2012. Then, we integrated the worldwide declared essential patent database with technology
specification database, and thereby mapped each of those declared essential patents toward every
technology specification, correspondingly. Then, we examined how the relationships between
declared essential patents and technology specifications were. In other words, by using thearchitecture of telecommunication system defined previously, we attempted to understand how thosedeclared essential patents held by a particular standard setter were related to different technology
specifications, or how those declared essential patents were only related to those technology
specifications belonging to the same technology specification categories.
For this purpose, we used network analysis software: UCInet and its function, called“Affiliations: Convert 2-mode to 1-mode data,“ to extract interdependent relationships between
various technology specifications which were connected by declared essential patents. Afterwards, wehighlighted this interdependent relationships in leading standard setters by the U.S. and European
data to see how standard setters conducted their patent strategies while setting technology
specifications for the accumulated periods of every 5 years. The External-Internal index (Krackhardt
and Stern, 1988) was also adopted to know how standard setters intensively declared their essential
patents with various technology specifications in terms of the architecture of telecommunication
system.

5. Case Study
5.1. Sustaining Innovation in the Telecommunication Industry
The telecommunication industry is a relatively new industry. The first commercial mobile phoneemerged circa 1985, and the demand and production started increasing exponentially since the early
1990 (Alcacer and Oxley, 2014). Since 1996, more than 50% of the product system market (i.e.,
telecommunication infrastructure and mobile phone) had been dominated by Nokia, Ericsson, andMotorola (Table 2). In 2010, Nokia, Ericsson, Motorola, Siemens, and Alcatel still accounted for morethan 80 percent of the global mobile phone sales (Alcacer and Oxley, 2014). As Funk (2002) andFunk (2009) assert, the success of Nokia, Ericsson and Motorola in the infrastructure and mobile
phone business markets relied on their attendance in the standardization activities. By setting
10

Downloaded from http://ipr.etsi.org/searchIPRD.aspx

10technology specifications for a long period of the standardization, Nokia, Ericsson and Motorola
should have accumulated a wide range of technology knowledge compared to non‐standard
setters. Thus, such knowledge is presumed to enable these leading standard setters to develop
their infrastructure and mobile phone developments continuously prior to their competitors.

Table 2 Firms’ Worldwide Market Share in Infrastructure and Mobile Phone (1996~2007)

It is widely known that telecommunication systems composited by infrastructures andmobile phones are CoPS (Davies, 1996; Davies, 1999; Davies and Brady, 2000; Miller, Hobday,
Leroux-Demers and Olleros, 1995; Hobday, 1995; Hobday, 1998; Hobday, 2001), which requires
technology specifications to lower

the complexityof the technology development oftelecommunication system. ETSI, formed by European Commission in 1987, aimed to help CEPT
(Committee on European Postal Regulations), which favored operators, speed up the 2G GSM
technology standardization from 1988 to 1991. 3GPP, as the central standard body, was in charge of
coordinating other standard bodies to implement the 3G UMTS standardization since 199811.
The “Cellular Architecture” has been known as the dominant design that defines how
infrastructure interacts complicatedly with various mobile phones through multiple cellular signal
11

3GPP cooperates with standard bodies of other countries to work on the 3GPP partnership project for implementing

the same technologies and speeding up service adoption. In addition to the European standard body ETSI, there are also
other standard bodies in different countries, such as ARIB (Association for Radio Industries and Businesses) and TTC(Telecommunication Technology Committee) of Japan, CWTS (China Wireless Telecommunication Standard) of
China, T1 (Standards Committee T1 - Telecommunications) of U.S., and TTA (Telecommunications Technology
Association) of Korea, in charge of the 3G UMTS standardization.

11

areas (Davies, 1996; Steinbock, 2002) 12. Because the standardization of 2G GSM and 3G UMTS
shared the same “Cellular Architecture,” the core concept of the telecommunication system (Davies,
1996; Steinbock, 2002), standard setters created technology specifications at the early stage ofstandardization could easily apply their knowledge to the continuous technological improvements ofthe telecommunication system at the latter stage of standardization.
Regarding to this concern, we found that in 6,243 technology specifications published by 3GPPfrom 15 April, 1988 to December, 2009, approximately 46.55 % of the 3G UMTS technology
specifications were derived from the 2G GSM technology specifications13. This finding requires us to
examine whether leading standard setters, Nokia, Ericsson and Motorola, also leveraged their
existing technology specifications to create new technology specifications for the long period of
the standardization. If so, regardless of their strategic intentions, Nokia, Ericsson and Motorola
were supposed to conduct their “knowledge management” with enhancing their knowledge basecontinuously in the standardization.
Observing the technology change of the telecommunication system also provides us an
opportunity to understand what sorts of knowledge were required for the knowledge management of
Nokia, Ericsson and Motorola. In respect of the extent of technology changes from 15 April, 1988 to
December of 2009 in the telecommunication industry, this study used 112,236 change requests of
6,243 technology specifications and classified these change requests into the 5 levels of thetelecommunication system: “Service & Technical Issues, Requirements and Plans,” “Core Network
and Intra Fixed Network,” “Air Interface,” “Mobile Phone” and “Security Algorithm.” 14 As shown in
12Compared to 2G GSM, 3G UMTS uses higher frequency bands and more state-of-the-art wireless accesstechnologies to increase its network capacity and allows more simultaneous calls. In particular, the 3G UMTS
technology reduces the failures of dropped calls when users are moving from one place to another by cars or trains. In
addition, the high-speed data download capability is another advantage of 3G UMTS. The notion of the 3G UMTS
technology has shifted telecommunication from voice communication to "mobile internet" or "broadband wireless,"which expands the range of mobile communication services from voice data to package data in terms of always-onlinealways-connected.
13

We referred the “3GPP TR 21.900 V7.2.0 (2006-06), P.9 Table 2: Specification number ranges bbb” to caculate thisnumber.
14 According to “Categories of Change Requests on P.16 of 3GPP TR 21.900 V7.2.0 (2006-06)”, there are the A, B, C,

D, E and F categories of change requests. The E category is not used, the A category is used for modifying andupdating pre-version technology standards, and the D and F categories are used to modify typo mistakes of existing
documents. We chose to use the B and C categories to analyze change requests because the B category represents new
functions updated and the C category represents “technology modification and new features.” The percentages ofchange requests relevant to “technology modification and new features” of a total change requests, in accordance withthe 5 levels of telecommunication system, are 28.29%, 26.71%, 18.45%, 9.77%, and 0% respectively for the 2G GSM“Service & Technical Issues, Requirements and Plans,” “Core Network and Intra Fixed Network,” “Air Interface,”

12Figure 2, in addition to the change requests of “Air Interface15,” the change requests related to theother 4 levels of the telecommunication system all increased, which accompanied the releases oftechnology specifications (e.g., the period of implementation and further development of 3G UMTS
technology specifications) even after the stage of technology specifications were established (e.g., theperiod of setting the 3G UMTS technology specifications)16.

Figure 2 Change Requests of Technology Specifications(Source from http://www.3gpp.org, analyzed by authors)

Combined with the previous findings (i.e., about 46.55 % of the 3G UMTS technology
specifications were derived from 2G GSM technology specifications), the data in Figure 2 indicatesthat technology development of the telecommunication system requires standard setters to pay
attention to dynamically changing technology specifications of existing technologies including all the“Mobile Phone” and “Security Algorithm.” and 26.09%, 21.74%, 17.56%, 11.70% and 27.48% respectively for eachlevel of the 3G UMTS telecommunication system. These numbers mean that standard setters need to deal with change
requests relative to “technology modification and new features” for their product developments.
15

Even though the ratios of change requests related to technology modification and new features of total the 2G GSM

and 3G UMTS change requests on “Air Interface” are not as high as the ratios on other levels respectively, standard
setters need to pay much attention to this level.
16

Figure 2 shows that the number of change requests has decreased since 2008. This is because that at the timing of thedata download on 20, December 2009, the 3G UMTS technology standardization was almost completed in “Release 8(i.e., technology specifications)” released in 2008 while the 4G LTE technology standardization started. Moreover, we
referred Bekkers and West (2009, p.87) to illustrate the periods of “setting the 3G UMTS technology specifications”
and “the implementation and further development of the 3G UMTS technology specifications.”13

5 levels of the telecommunication system. In other words, our data implies that standard setters’
technology developments are sustaining innovations. In such a circumstance, creating a wide range oftechnology specifications can become inevitable for standard setters which attempt to establish
competitive advantage in accommodating to technology changes caused by change requests.
Therefore, the knowledge management of leading standard setters, such as Nokia, Ericsson andMotorola, is presumed to cover all the 5 levels of telecommunication system and thus enhancetheir knowledge bases for sustaining their advantages of infrastructure and mobile phonedevelopments for the long period of the standardization.

5.2. Standard Setters’ Knowledge Base and Its Derivations
This section attempts to reveal the sorts of knowledge that standard setters have in the 2G GSM
and 3G UMTS telecommunication systems. First, we found that 6,243 technology specifications
were created by 50 and 87 companies respectively in the 2G GSM and 3G UMTS
standardizations. Moreover, it is approximated that 59.55% and 61.84% of the totals of the 2G
and 3G technology specifications were created by top 5 standard setters. As shown in Table 3,
first, we noticed that as for the quantity of standard setters’ 2G GSM technology specifications, Nokia,
Ericsson and Motorola were each ranked as number 1 (370 pieces), number 4 (104 pieces), andnumber 6 (94 pieces) among 50 firms. As for the quantity of standard setters’ 3G UMTS technology
specifications, Nokia, Ericsson and Motorola were each ranked as number 1 (808 pieces), number 2(612 pieces), number 11 (81 pieces) among 87 firms17.

17 We also notice that the quantity of Qualcomm’s 2G GSM technology specifications was 317, which was next to

Nokia’s. However, Qualcomm’s 3G UMTS technology specifications were only 94, which were less than Nokia’s andEricsson’s but similar to the quantity of Motorola’s 3G UMTS technology specifications. Moreover, it is worth noticingthat the Chinese telecommunication equipment and mobile phone manufacturers, Huawei and China Mobile, were the
4th and 7th amongst firms contributing to the 3G technology specifications.

14

Table 3 Top 14 2G GSM And 3G UMTS Standard Setters (Judged By Technology Specifications)

Second, we further examined these firms’ quantity of technology specifications compared to thetotal technology specifications at each level of the telecommunication system. For example, Nokia had
102 of the 2G GSM and 251 of the 3G UMTS technology specifications of the “Service & TechnicalIssues, Requirements and Plans” level out of the total of 707 and 1,182 respectively for the 2G GSM
and 3G UMTS. Nokia owned 14% and 21% of the total 2G GSM and 3G UMTS technology
specifications at the “Service & Technical Issues, Requirements and Plans” level. Following thiscalculation, Figure 3 shows that Nokia had its certain percentage of technology specifications at eachlevel of the 2G GSM and 3G UMTS telecommunication system, which means that Nokia was the firm
who created the broadest knowledge base of telecommunication system by aggressively setting
technology specifications among the top 14 firms. Similarly, Ericsson created broad knowledge basethrough setting the 3G UMTS technology specifications compared to its activities in setting the 2G
GSM technology specifications. Motorola had less significant knowledge base through setting boththe 2G GSM and 3G UMTS technology specifications. Surprisingly, Qualcomm created broad
knowledge base. In particular, the share of its technology knowledge related to “Core Network andInfra Fixed Network” was approximated to 63% at this level, compared to its activities in setting the
3G UMTS technology specifications. The data here combined with previous findings shows that
Nokia, Ericsson and Motorola had created a wide range of knowledge base related to the wholetelecommunication system through creating the 2G GSM and 3G UMTS technology specifications.

15

Figure 3 Leading Standard Setters’ 2G GSM and 3G UMTS Technology Specifications(Percentages on Each Level of Telecommunication System)(Source from http://www.3gpp.org, analyzed by authors)

Third, we counted the number of re-versions of technology specifications to reveal how standard
setters sustain their knowledge bases for a long period. We used the re-versions of technology
specifications to represent the deviations of standard setters’ knowledge bases. Once the change
requests are acknowledged at the relevant committees, then a new version is filed following theoriginal technology specifications. Consequently, some particular technology specifications are, orwill be, modified and updated for the next version releases of corresponding technology specifications.
For example, Nokia’s TS 02.16 “International Mobile Station Equipment Identities (IMEI)” has been
re-versioned into the Phase 1, Phase 2, Release 97, and Release 98 of technology specifications.
As shown in Table 4, 6,243 of the 2G GSM and 3G UMTS technology specifications were
derived from 2,248 common technology specifications. In other words, on average, 36% oftechnology specifications could be derived from one single technology specification. In particular, thederivations of technology specifications of Nokia, Ericsson, Motorola were 33%, 37% and 37%
respectively, which means that Nokia, Ericsson, and Motorola sustained their knowledge bases
underlying original technology specifications to create new technology specifications in terms of moreadvanced technology development. In summary, combined with previous findings, our data shows thatthe knowledge management of Nokia, Ericsson and Motorola covered all the 5 levels of
telecommunication system, and had continuously sustained their knowledge bases for developing
infrastructures and mobile phones for the long period of the standardization.

16

Table 4 Firms’ Derivation of Technology Specifications(Source from http://www.3gpp.org, analyzed by authors)

5.3. The Appropriability of Standard Setters’ Knowledge
In this section, we attempt to reveal how leading standard setters, Nokia, Ericsson and Motorola,prevented other competitors from their infringement (i.e., free-riding) on standard setters’ advantagesof proprietary knowledge in the standardization. Here, in order to show firms’ declared essential
patent strategies in accordance with their standardization activities for the 5 levels of
telecommunication system, we used the data of 64,228 essential patents which were declared to ETSI
from 1990 to 2012, and combined the data with the database of technology specifications. Any firm
can declare their patents published in any countries as the essential patents of 3GPP. Thus, we filteredout those declared essential patents which were only published at the U.S. and Europe patentoffices18as the U.S. and Europe are two of the most competitive telecommunication markets in theworld. Standard setters’ declared essential patents can be regarded as property rights to protect theiradvantages under FRAND license terms against products sold in these markets without permissions or
licenses from standard setters,.
Figure 4 shows the most representative standard setters’ positions (as also used in Table 4)
corresponding to the quantities of the 2G GSM and 3G UMTS technology specification settings andtheir declared essential patents published at the U.S and European patent offices19. Standard setters
18

The percentages of declared essential patents published at the U.S. and European patent offices of the worldwide

declared essential patents approximated 25.05%.
19

Nokia’s “quantity of technology specifications” and “quantity of declared essential patents” were 1178 and 2051;

Ericsson’s were 716 and 1162; Motorola’s were 175 and 813; Qualcomm’s 411 and 3020; Alcatel-Lucent’s were 392

17

shape two types of the relationship between the 2G GSM and 3G UMTS technology specifications
and declared essential patents. One type is found with the traditional leading standard setters: Nokia,
Ericsson, and Motorola. These standard setters created technology specifications while also declaring
sufficient essential patents to prevent non-standard setters from infringing on the advantage ofstandard setters’ proprietary knowledge. The other type is represented by Qualcomm, who did not
create so many technology specifications as Nokia and Ericsson, but declared more essential patents
than Nokia and Ericsson20. This finding confirms that it is very important for standard setters like
Nokia to declare patents so that they can reduce non-standard setters’ infringements on standard
setters’ efforts for setting technology specifications.
In the remainder, we used the “UCInet” analysis tool to examine the knowledge management of
Nokia, Ericsson, Motorola and Qualcomm. In particular, we focused on the relationship between theirtechnology specifications and declared essential patents published at the U.S. and European patentoffices from 1988 to 2012.

Figure 4 Firms’ 2G GSM and 3G UMTS Technology Specifications and Declared
Essential Patents (1988 to 2012, published by U.S. and European patent offices)(Source from 3GPP technology specifications: http://www.3gpp.org and ETSI declared essential
patents: http://www.etsi.org/services/ipr-database, analyzed by authors)and 153; Vodafone’s were 384 and 0; Huawei’s were 423 and 557; RIM’s were 189 and 0; Source Com’s were 119 and0; Nortel’s were 107 and 213; NEC’s were 107 and 277; China Mobile’s were 104 and 0, respectively.
20

This finding echoed with Goodman and Myers (2005) is that during the 3G UMTS technology standardization,

Nokia and Qualcomm accused each other of falsely reporting the quantities of their essential patents, which means thatthey did not have to pay license fees to the opposite party as demanded.

18

First, Figure 5 and Figure 6 show the relationships between technology specifications connectedby the worldwide declared essential patents respectively as for 2G GSM and 3G UMTS. In these
Figures, the nodes and lines respectively represent the series number of technology specifications
defined by 3GPP and relevant declared essential patents. The more the quantity of declared essential
patents connected amongst technology specifications is, the thicker the lines are. Moreover, in order tovisually highlight those technology specifications which belong to each level of telecommunication
system, the nodes are colored with deep blue, green, red, yellow and light blue respectively for“Service and Technical Issues, Requirements and Plans,” “Core Network and Intra Fixed Network,”“Air Interface,” “Mobile Phone” and “Security Algorithm” of telecommunication system.
As shown in the Figure 6, the 36 series technology specifications (i.e., “Service and TechnicalIssues, Requirements and Plans” level) were strongly connected with the 25 series technology
specifications (i.e., “Air Interface” level) by various declared essential patents. Besides, the 36 series
technology specifications also had relationships with other series technology specifications except the30, 35 and 28 series technology specifications via declared essential patents. This means that when
implementing a new telecommunication service by setting the 36 series technology specifications,standard setters actively declare essential patents with the technology specifications related to “Core
Network and Intra Fixed Network,” “Mobile Phone” and “Security Algorithm” as well as the “AirInterface” technology specifications.
Furthermore, these Figures reveal that the 3G UMTS technology specifications are morestrongly connected by various worldwide declared essential patents than the case of the 2G GSM
technology specifications. By using the “Density” analysis of UCInet and controlling regions (i.e.,
U.S., Europe, Japan and China) where essential patents were published, we found the same situations
as above-mentioned. In the case of 2G GSM, the “Density” of technology specifications connected by
the declared essential patents of the worldwide, the U.S., Europe, Japan, and China was respectively
0.371, 0.371, 0.362, 0.343, and 0.286. In the case of 3G UMTS, the “Density” of these regions each
was represented in 0.434, 0.426, 0.419, 0.397, and 0.382. These results indicate that standard setterswould start from appropriating and sustaining their knowledge to themselves to the certain extent in
the creation of the 2G GSM technology specifications with declaring patents under the FRAND
license terms and continue such knowledge management to the 3G UMTS technology specifications
as well.

19

Figure 5 Relationships between 2G GSM Technology Specifications Connected by Worldwide
Declared Essential Patents.

(Source from 3GPP technology specifications: http://www.3gpp.org and ETSI declared essential patents:
http://www.etsi.org/services/ipr-database, analyzed by authors)

Figure 6 Relationships between 3G UMTS Technology Specifications Connected by Worldwide
Declared Essential Patents.

(Source from 3GPP technology specifications: http://www.3gpp.org and ETSI declared essential patents:
http://www.etsi.org/services/ipr-database, analyzed by authors)

20

Next, in order to understand how standard setters appropriated their knowledge to themselves insetting technology specifications with declaring patents under the FRAND license terms from 1988 to
2012, we further grouped the “technology specifications” and “declared essential patents (onlybelonged to the U.S. and European patent offices)” of Nokia, Ericsson, Motorola and Qualcomm inaccordance with the 5 levels of telecommunication system. Here, Nokia, Ericsson, Motorola and
Qualcomm are presumed to be representative standard setters because the total ratio of the declared
essential patents of Nokia, Ericsson, Motorola and Qualcomm approximated 43.79%. Moreover, we
adopted Krackhardt and Stern (1988)’s “External-Internal Index” to examine whether Nokia, Ericsson,
Motorola and Qualcomm appropriated their knowledge to themselves by declaring essential patents totechnology specifications within a certain level or across multiple levels of telecommunication systemfrom 1988 to 2012. The “External-Internal Index” was used to measure the extent of interdependencesamongst various elements of a system. If the technology interdependences are divided equally, theExternal-Internal index will equal to zero. As the “External-Internal Index” approaches -1.0, thoseparticular elements have stronger internal interdependences but weaker relationships with other levelsof telecommunication architecture: technology specifications connected by declared essential patents
only within a certain individual level (i.e., each level of telecommunication system are mutuallyindependent without being connected by any declared essential patents). Conversely, as the “ExternalInternal Index” index approaches +1.0 at each level, those particular elements at a certain level oftelecommunication architecture have weaker internal interdependences but stronger relationships withthe other levels: multiple levels of telecommunication system are interdependently connected bydeclared essential patents.
In order to easily examine the differences between leading standard setters, we observed thecases of Nokia, Ericsson, Motorola and Qualcomm for 5 years cumulated periods from 1988 to 2012.
Figure 7 shows that except Nokia’s “External-Internal Index” in “Service and Technical Issues,
Requirements and Plans” and “Air interface” with negative degrees during 1990-1999, Nokia,
Ericsson, Motorola and Qualcomm all had positive degrees in all the 5 levels of telecommunication
system. This result implies that standard setters declare their patents not only related to technology
specifications belonging to certain individual levels but also related to various technology
specifications across different levels of telecommunication system.
In particular, both the extent of interdependencies between the technology specifications related
to “Mobile Phone” and the technology specifications related to other levels, and the extent ofinterdependencies between the technology specifications related to “Security Algorithm” and thetechnology specifications related to other levels were highest in the cases of Nokia, Ericsson,
Motorola and Qualcomm. Conversely, the extent of interdependencies between the technology

21

specifications related to “Air Interface” and the technology specifications related to other levels were
lowest in the cases of Nokia, Ericsson, Motorola and Qualcomm. Interestingly, except Ericsson, thecases of Nokia, Motorola and Qualcomm all showed that the extent of the interdependencies of thetechnology specifications related to a particular level with the technology specifications related toother level were ranked from the highest of “Security Algorithm”, “Mobile Phone”, “Core Network
and Intra Fixed Network”, “Air Interface” to the lowest of “Service and Technical Issues,
Requirements and Plans”.
These results indicate that the telecommunication system is not a completed modular system.
Rather, various technology specifications of multiple levels of telecommunication system need tointeract with each other when standard setters are in pursuit of sustaining innovations of theirinfrastructures and mobile phones. In that case, declaring essential patents may help standard setterssecure property rights to appropriate their knowledge to themselves regarding interdependent
technology information amongst the 5 levels of telecommunication system.
This explanation can also extend our understanding on the technology development oftelecommunication system. New entrant are allowed to exploit the technology specifications createdby standard setters. However, new entrants should face more difficulties to develop their products thanleading standard setters. In contrast, standard setters engaged in standardization would be at anadvantage of learning to cope with multiple levels of technology specifications connected by theirdeclared essential patents.

22

Figure 7 External-Internal Index of Standard Setters’ 2G GSM and 3G UMTS Technology
Specifications and Declared Essential Patents Published by U.S. and European Patent Offices
2G GSM

3G UMTS(Source from 3GPP technology specifications: http://www.3gpp.org and ETSI declared essential patents:
http://www.etsi.org/services/ipr-database, analyzed by authors)23

6. Discussion
Existing studies have emphasized firms’ standardization strategies presumed to support firms’
business competitiveness and/or firms’ related patent strategies (by essential patents) to “appropriate”
their technologies in standardization. Such studies have primarily examined the criticality of setting
technology specifications and/or the quantities of standard setters’ essential patents. In the meantime,
our study attempts to examine standard setters’ knowledge management by exploring their “intra-firm”
networks of technology specifications and declared essential patents in consideration of technology
diffusion through standardization.
Setting standardized technology specifications, which increases the adaptability andcompatibility of components/subsystems with the whole system, can help standard setters’ productsystems being quickly and widely accepted by the market (Carlsson and Stankiewicz, 1999; Farrell
and Simcoe, 2007). Such technology specifications will work better on standard setters’ proprietarysystems, and better fit standard setters’ business models in pursuit of their private benefits of productdevelopment (Funk, 2002; 2009).
Our results shows that leading standard setters, Nokia, Ericsson, Motorola, were likely to create awide range of the 2G GSM and 3G UMTS technology specifications related to a wholetelecommunication system. Some new technology specifications were derived from their existing
technology specifications. These results imply that leading standard setters have been reinforcing
technology specifications closely related to their existing proprietary knowledge so that every parts of
their telecommunication system products can be well-accepted by various operators and competitors.
At the same time, it is also important for standard setters to declare their patents as being
essential patents on the technology specifications under FRAND license terms in order to avoid nonstandard setters’ free-riding infringement on their proprietary knowledge. For instance, as shown in
our results, the declared essential patents of Nokia, Ericsson and Motorola were concentrated on
specific fields of technology specifications critical for mobile phone development: “Air Interface” and“Core Network and Intra Fixed Network.” Therefore, new entrants’ mobile phone development havebeen required to pay extra license fees to Nokia, Ericsson and Motorola for using their technologies
essential to product development in the industry.
However, declaring essential patents does not sufficiently explicate leading standard setters’continuous and distinct advantages in product development over new entrants. Our semi-structureinterviews support that the telecommunication products of Nokia, Ericsson and Motorola could be
regarded as the golden samples or reference devices for other firms’ mobile phone development21. The
21

Only firms, like Nokia, who created a wide range of technology specifications could clearly understand the real

logics and descriptions written in those technology specifications for solving technical problems related to “AirInterface” (interview with Frank Chen, a technology marketing manager of Nokia-Siemens, on 23, July 2012;24

fact corroborates that while reinforcing existing knowledge on a wide range of technology
specifications, standard setters can continuously lead product development in the industry and thereby
establish advantages over their competitors even under the surge of standardization. The accumulated
networks of knowledge regarding to the interdependencies between technology specifications anddeclared essential patents, shown in this study, can further reveal why Nokia, Ericsson and Motorola
could continuously release their telecommunication products prior to other competitors and secured
their market shares.
The development of complex product systems, like telecommunication system, require firms tointegrate and combine externally different domain knowledge (Brusoni and Precipe, 2001; Brusoni,
Precipe and Pavitt, 2001; Hobday, 1995; 1998; 2001). The results of this study show standard setters’capabilities (i.e., knowledge) to be found in the management of different domains of knowledge insidethemselves particularly for developing complex systems. Drawing on the results, this study cansuggest that particularly for the development of complex product systems in standardization, it isimportant for standard setters to conduct knowledge management in terms of dealing with theinterdependencies between technology specifications and declared essential patents.
The results of the networks of technologies within leading standard setters provide a witnessing
fact that even under the surge of standardization, standard setters’ competitiveness particularly in thedevelopment of complex product system rests on architectural knowledge. Dealing with theinterdependencies between technology specifications and declared essential patents will require
standard setters to have architectural knowledge rather than the simple aggregation of element
knowledge (Henderson and Clark, 1990; Henderson and Cockburn, 1994).
Leading standard setters examined in this study did not separately pursue various fields oftechnology specifications and declared essential patents. Rather, these standard setters were proficientin controlling the interdependencies, the networks, between a variety of fields of technology
specifications and declared essential patents. Furthermore, these firms developed such networks
centering on a few critical technology fields such as “Air Interface” and “Core Network and Intra
Fixed Network.” These findings indicate that standard setters need to maintain their firm-specificarchitectural knowledge to align their technology developments with continuous improvements on
every part of product systems in standardization. Otherwise, standard setters cannot properly allocateinterviewed with Yamamoto, Masahiko, president of Matsushita Communication United Kingdom (1997-2001), 29,
November 2007). Moreover, the “Air Interface” between infrastructures and mobile phones is also relative totelecommunication regulation, local topography and temperature, and the parameters of telecommunication equipment:
only firms that are continuously creating relative technology specifications, like Nokia, could hold sufficienttechnology knowledge to adjust parameters for acquiring the best signal coverage, low power consumption, and highstability of cell-switching (interviewed with Ilkka Rahnasto, vice president, deputy chief legal officer of Nokia, 14,September 2014).

25

their technologies to various technology specifications by declaring essential patents. This study
contributes to describing and explicating the statuses and transitions of such knowledge.
The contribution of this study is also found in proposing the approach and perspective to reveal
the status and transition of such elusive knowledge, capabilities, by structured quantitative data.
Previous studies suggest that firms can learn, align and accumulate knowledge of productdevelopment through firms’ attendance in standardization. Based on such antecedents, the study
shows with structured quantitative data how it is vital for standard setters to meticulously deal withknowledge management by creating technology specifications harmonized with declaring essential
patents. The approach and perspective of this study will help the future development of empiricalstudies on standard setters’ knowledge management.

7. Conclusion
By examining the networks of technology specifications and declared essential patents of standard
setters, this study attempts to envisage how standard setters manage their knowledge to sustain theircompetitive advantages. First, we reviewed past studies on standard setters’ strategies, and thereby
proposed our research question: why standard setters can sustain their competitive advantage in spiteof the diffusion of their knowledge for the long period of standardization. Second, by focusing ontechnology specifications and declared essential patents as critical knowledge to be managed, we
proposed our framework, research focus, and methodology to capture the knowledge management ofstandard setters. Third, we examined standard setters’ knowledge management by analyzing the
networks of technology specifications and declared essential patents of the focused standard setters.
Following the results, strategic implications were discussed in relation to standard setters’ knowledge
management to sustain competitive advantage in product development. This study also provided apractical implication that firms engaged in standardization need to conduct their knowledge
management effectively and strategically by integrating knowledge in terms of the architectural aspectof the product system concerned. Firms are expected to manage their knowledge across their business,
standardization and patent divisions in order to effectively manage technology specifications anddeclared essential patents.
The limitations of this study are roughly classified into three issues. First, while envisaging thefoundation of competitive knowledge management in standardization, this study did not sufficiently
examine the differences of the networks of technology specifications and declared essential patents
between standard setters even though such differences should result in different performances of
product developments between standard setters.

26

Second, this study lacks the examination of the decline of leading standard setters in the industry.
Leading standard setters with well-developed architectural knowledge had maintained theiradvantages over new entrants. Nevertheless, these firms all lost their competitive advantages.
Knowledge spillovers collateral with knowledge codification by the further evolution of thestandardization and the spread of knowledge for implementation across firms would largely explain
the decline of standard setters.
Third, relevant to the second issue, this study did not explicate non-standard setters’ innovations
exerted from standard setters’ technology specifications or declared essential patents, which may
weaken standard setters’ effects on their knowledge management. For example, we found that
Qualcomm was the one who declared many essential patents and thereby insisted that its patents were
essential to existing technology specifications. Also other semiconductor manufacturers (e.g., TI:
Texas Instruments, Freescale, Infineon, Mediatek and so on) could acknowledge the technologicalcontext of declared essential patents related to certain technology specifications, and thus improve thetechnologies of declared essential patents. Such manufacturers would apply to patent offices of many
countries for new patents of such improved technologies22.
Future studies will be required to explore how non-standard setters’ innovations can occur
through knowledge spillovers and influence incumbent standard setters’ knowledge management.
Such attempts will also help to elucidate how standard setters’ distinctive architectural knowledge canbe undermined. Lastly, standardizations in other industries (e.g., automobile, industrial machinery,other ITC industries) also should be taken into account for drawing comprehensive implications ofstandard setters’ knowledge management in standardization.

22 It is widely known that the Asian new entrants adopt chipsets of those semiconductor vendors to quickly develop

their mobile phones (Yasumoto and Shiu, 2007). In fact, these Asian new entrants have threatened the standard setters’market shares (i.e., Nokia, Ericsson, Motorola, and so on).

27

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*The study is financially supported by Scientific Research (B), Grants-in-Aid for Scientific Research(KAKENHI) of MEXT in FY 2014.

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