Giving away the R32 refrigerant patents: an intellectual-property strategy (2011)

The choice to create a standard rather than fence it in

The heart of this decision is that Daikin deliberately used the patent — a tool of monopoly — as a means of opening up. Handing a prized technology to rivals could, in the short term, thin out its own advantage. That it opened up all the same can be read as resting on a reading that unless a superior refrigerant spread widely, neither the environmental benefit nor the market expansion would ever arise. Rather than guarding and monopolizing, to open up and widen the market itself, and within it bring the scale and brand of the first mover to bear — here was a strategy that ran counter to the logic of monopoly.

That said, opening up ties into leadership only when the muscle of mass production and the brand come with it. Once it became a technology anyone could use, the advantage shifts away from the patent itself and toward the power to make it most cheaply and reliably and to be chosen as a standard-bearer for the environment. To see regulation as a cost, or as an opportunity to build a standard — the choice around R32 is a case that showed how you let a technology go can sway competition as much as how you hold it close.