Pekka Sääskilahti
Economic Perspectives and Applications on Licensing, Standards, and Patent Markets
Pekka Sääskilahti, PhD (econ.) is a Senior Economist in Nokia Corporation. He has extensive experience in working on topics covering both macro- and microeconomic issues. His recent work has focused on the microfoundations of patent markets and on IPR business development. He has developed and estimated damages models for large scale patent litigation cases as well as novel patent valuation techniques, and he is also active in economic research.
Abstract
Recent market trends have increased the need for patent valuation, especially in the context of management decision making, but also due to more rigorous regulatory and legal requirements. In the telecoms industry, standardisation and active patent markets call for robust and easily implementable valuation techniques. The theoretical framework for patent valuation is relatively established, with an understanding on the key value drivers, but the problems in valuation typically arise with practical implementation and there has been a gap between the traditionally used simple valuation models and the current theory.
Two inherent issues relate to patent value: i) incomplete information about the asset and between the transacting parties, and ii) strategic interaction between the parties, which mean that valuation work must be done in context. The economic reasoning for understanding such situations resorts to game theory. Game theoretic modeling offers an elegant and robust way to do patent valuation, while the difficulties in implementing sophisticated game theory in practice can be substantially alleviated by resorting to simulation techniques.