Antitrust Guidelines for the licensing of Intellectual Property 
 
                               
Antitrust Guidelines
for the Licensing of Intellectual Property 
Issued by the
U.S. Department of Justice(1)
and the
Federal Trade 
Commission
April 6, 1995
TABLE OF CONTENTS
1.  Intellectual property protection and the antitrust 
laws 
2.  General 
principles 
          2.1   
Standard antitrust analysis applies to intellectual property 
          2.2  Intellectual property and 
market power 
          2.3  
Procompetitive benefits of licensing 
3.  Antitrust concerns and modes of analysis 
          3.1  Nature of the 
concerns 
          3.2  Markets 
affected by licensing arrangements 
                    3.2.1  Goods markets 
                    3.2.2  Technology 
markets 
                    3.2.3  Reseach and development: Innovation markets 
          3.3  Horizontal and vertical 
relationships 
          3.4  
Framework for evaluating licensing restraints 
4.  General principles concerning the Agencies' 
evaluation of licensing arrangements 
          4.1  Analysis of anticompetitive 
effects 
               4.1.1  
Market structure, coordination, and foreclosure 
               4.1.2  Licensing arrangements 
involving exclusivity 
          4.2  Efficiencies and justifications 
          4.3  Antitrust "safety zone" 
5.  Application of general 
principles 
          5.1  
Horizontal restraints 
          5.2  Resale price maintenance 
          5.3  Tying arrangements 
          5.4  Exclusive dealing 
          5.5  Cross-licensing and pooling 
arrangements 
          5.6  
Grantbacks 
          5.7  
Acquisition of intellectual property rights 
6.  Enforcement of invalid intellectual property 
rights 
1.       Intellectual property 
protection and the antitrust laws
1.0      These Guidelines state the antitrust enforcement policy of the 
U.S. Department of Justice and the Federal Trade Commission (individually, "the 
Agency," and collectively, "the Agencies") with respect to the licensing of 
intellectual property protected by patent, copyright, and trade secret law, and 
of know-how.(2) By stating their 
general policy, the Agencies hope to assist those who need to predict whether 
the Agencies will challenge a practice as anticompetitive. However, these 
Guidelines cannot remove judgment and discretion in antitrust law enforcement. 
Moreover, the standards set forth in these Guidelines must be applied in 
unforeseeable circumstances. Each case will be evaluated in light of its own 
facts, and these Guidelines will be applied reasonably and flexibly.(3)
      In the United States, patents confer rights to exclude 
others from making, using, or selling in the United States the invention claimed 
by the patent for a period of seventeen years from the date of issue.(4) To gain patent protection, an 
invention (which may be a product, process, machine, or composition of matter) 
must be novel, nonobvious, and useful. Copyright protection applies to original 
works of authorship embodied in a tangible medium of expression.(5) A copyright protects only the expression, not 
the underlying ideas.(6) Unlike a 
patent, which protects an invention not only from copying but also from 
independent creation, a copyright does not preclude others from independently 
creating similar expression. Trade secret protection applies to information 
whose economic value depends on its not being generally known.(7) Trade secret protection is conditioned upon 
efforts to maintain secrecy and has no fixed term. As with copyright protection, 
trade secret protection does not preclude independent creation by 
others.
      The intellectual property laws and the antitrust laws 
share the common purpose of promoting innovation and enhancing consumer 
welfare.(8) The intellectual 
property laws provide incentives for innovation and its dissemination and 
commercialization by establishing enforceable property rights for the creators 
of new and useful products, more efficient processes, and original works of 
expression. In the absence of intellectual property rights, imitators could more 
rapidly exploit the efforts of innovators and investors without compensation. 
Rapid imitation would reduce the commercial value of innovation and erode 
incentives to invest, ultimately to the detriment of consumers. The antitrust 
laws promote innovation and consumer welfare by prohibiting certain actions that 
may harm competition with respect to either existing or new ways of serving 
consumers.
  
2.     General 
principles
2.0      These 
Guidelines embody three general principles: 
- for the purpose of antitrust analysis, the Agencies regard intellectual 
property as being essentially comparable to any other form of property; 
 - the Agencies do not presume that intellectual property creates market power 
in the antitrust context; and 
 - the Agencies recognize that intellectual property licensing allows firms to 
combine complementary factors of production and is generally 
procompetitive.
 
-  
 
 
2.1      Standard antitrust analysis applies to 
intellectual property
      The Agencies apply the same general antitrust 
principles to conduct involving intellectual property that they apply to conduct 
involving any other form of tangible or intangible property. That is not to say 
that intellectual property is in all respects the same as any other form of 
property. Intellectual property has important characteristics, such as ease of 
misappropriation, that distinguish it from many other forms of property. These 
characteristics can be taken into account by standard antitrust analysis, 
however, and do not require the application of fundamentally different 
principles.(9)
      Although there are clear and important differences in 
the purpose, extent, and duration of protection provided under the intellectual 
property regimes of patent, copyright, and trade secret, the governing antitrust 
principles are the same. Antitrust analysis takes differences among these forms 
of intellectual property into account in evaluating the specific market 
circumstances in which transactions occur, just as it does with other particular 
market circumstances.
      Intellectual property law bestows on the owners of 
intellectual property certain rights to exclude others. These rights help the 
owners to profit from the use of their property. An intellectual property 
owner's rights to exclude are similar to the rights enjoyed by owners of other 
forms of private property. As with other forms of private property, certain 
types of conduct with respect to intellectual property may have anticompetitive 
effects against which the antitrust laws can and do protect. Intellectual 
property is thus neither particularly free from scrutiny under the antitrust 
laws, nor particularly suspect under them.
      The Agencies recognize that the licensing of 
intellectual property is often international. The principles of antitrust 
analysis described in these Guidelines apply equally to domestic and 
international licensing arrangements. However, as described in the 1995 
Department of Justice and Federal Trade Commission Antitrust Enforcement 
Guidelines for International Operations, considerations particular to 
international operations, such as jurisdiction and comity, may affect 
enforcement decisions when the arrangement is in an international 
context.
 
2.2      Intellectual property and market 
power
      Market power is the ability profitably to maintain 
prices above, or output below, competitive levels for a significant period of 
time.(10) The Agencies will not 
presume that a patent, copyright, or trade secret necessarily confers market 
power upon its owner. Although the intellectual property right confers the power 
to exclude with respect to the specific product, process, or work in 
question, there will often be sufficient actual or potential close substitutes 
for such product, process, or work to prevent the exercise of market power.(11) If a patent or other form of 
intellectual property does confer market power, that market power does not by 
itself offend the antitrust laws. As with any other tangible or intangible asset 
that enables its owner to obtain significant supracompetitive profits, market 
power (or even a monopoly) that is solely "a consequence of a superior product, 
business acumen, or historic accident" does not violate the antitrust laws.(12) Nor does such market power 
impose on the intellectual property owner an obligation to license the use of 
that property to others. As in other antitrust contexts, however, market power 
could be illegally acquired or maintained, or, even if lawfully acquired and 
maintained, would be relevant to the ability of an intellectual property owner 
to harm competition through unreasonable conduct in connection with such 
property.
 
2.3      Procompetitive benefits of 
licensing 
      Intellectual property typically is one component among 
many in a production process and derives value from its combination with 
complementary factors. Complementary factors of production include manufacturing 
and distribution facilities, workforces, and other items of intellectual 
property. The owner of intellectual property has to arrange for its combination 
with other necessary factors to realize its commercial value. Often, the owner 
finds it most efficient to contract with others for these factors, to sell 
rights to the intellectual property, or to enter into a joint venture 
arrangement for its development, rather than supplying these complementary 
factors itself.
      Licensing, cross-licensing, or otherwise transferring 
intellectual property (hereinafter "licensing") can facilitate integration of 
the licensed property with complementary factors of production. This integration 
can lead to more efficient exploitation of the intellectual property, benefiting 
consumers through the reduction of costs and the introduction of new products. 
Such arrangements increase the value of intellectual property to consumers and 
to the developers of the technology. By potentially increasing the expected 
returns from intellectual property, licensing also can increase the incentive 
for its creation and thus promote greater investment in research and 
development.
      Sometimes the use of one item of intellectual property 
requires access to another. An item of intellectual property "blocks" another 
when the second cannot be practiced without using the first. For example, an 
improvement on a patented machine can be blocked by the patent on the machine. 
Licensing may promote the coordinated development of technologies that are in a 
blocking relationship. 
      Field-of-use, territorial, and other limitations on 
intellectual property licenses may serve procompetitive ends by allowing the 
licensor to exploit its property as efficiently and effectively as possible. 
These various forms of exclusivity can be used to give a licensee an incentive 
to invest in the commercialization and distribution of products embodying the 
licensed intellectual property and to develop additional applications for the 
licensed property. The restrictions may do so, for example, by protecting the 
licensee against free-riding on the licensee's investments by other licensees or 
by the licensor. They may also increase the licensor's incentive to license, for 
example, by protecting the licensor from competition in the licensor's own 
technology in a market niche that it prefers to keep to itself. These benefits 
of licensing restrictions apply to patent, copyright, and trade secret licenses, 
and to know-how agreements.
EXAMPLE 1(13)
Situation:
ComputerCo develops a new, 
copyrighted software program for inventory management. The program has wide 
application in the health field. ComputerCo licenses the program in an 
arrangement that imposes both field of use and territorial limitations. Some of 
ComputerCo's licenses permit use only in hospitals; others permit use only in 
group medical practices. ComputerCo charges different royalties for the 
different uses. All of ComputerCo's licenses permit use only in specified 
portions of the United States and in specified foreign countries.(14) The licenses contain no 
provisions that would prevent or discourage licensees from developing, using, or 
selling any other program, or from competing in any other good or service other 
than in the use of the licensed program. None of the licensees are actual or 
likely potential competitors of ComputerCo in the sale of inventory management 
programs.
Discussion:
      The key competitive issue 
raised by the licensing arrangement is whether it harms competition among 
entities that would have been actual or likely potential competitors in the 
absence of the arrangement. Such harm could occur if, for example, the licenses 
anticompetitively foreclose access to competing technologies (in this case, most 
likely competing computer programs), prevent licensees from developing their own 
competing technologies (again, in this case, most likely computer programs), or 
facilitate market allocation or price-fixing for any product or service supplied 
by the licensees. (See section 3.1.) If the license agreements 
contained such provisions, the Agency evaluating the arrangement would analyze 
its likely competitive effects as described in parts 3-5 of these Guidelines. In 
this hypothetical, there are no such provisions and thus the arrangement is 
merely a subdivision of the licensor's intellectual property among different 
fields of use and territories. The licensing arrangement does not appear likely 
to harm competition among entities that would have been actual or likely 
potential competitors if ComputerCo had chosen not to license the software 
program. The Agency therefore would be unlikely to object to this arrangement. 
Based on these facts, the result of the antitrust analysis would be the same 
whether the technology was protected by patent, copyright, or trade secret. The 
Agency's conclusion as to likely competitive effects could differ if, for 
example, the license barred licensees from using any other inventory management 
program.
3.      Antitrust 
concerns and modes of analysis 
3.1     Nature of the concerns 
     While intellectual property licensing arrangements are 
typically welfare-enhancing and procompetitive, antitrust concerns may 
nonetheless arise. For example, a licensing arrangement could include restraints 
that adversely affect competition in goods markets by dividing the markets among 
firms that would have competed using different technologies. See, e.g., 
Example 7. An arrangement that effectively merges the research and development 
activities of two of only a few entities that could plausibly engage in research 
and development in the relevant field might harm competition for development of 
new goods and services. See section 3.2.3. An acquisition of 
intellectual property may lessen competition in a relevant antitrust market. 
See section 5.7. The Agencies will focus on the actual effects of an 
arrangement, not on its formal terms.
      The Agencies will not require the owner of 
intellectual property to create competition in its own technology. However, 
antitrust concerns may arise when a licensing arrangement harms competition 
among entities that would have been actual or likely potential competitors(15) in a relevant market in the 
absence of the license (entities in a "horizontal relationship"). A restraint in 
a licensing arrangement may harm such competition, for example, if it 
facilitates market division or price-fixing. In addition, license restrictions 
with respect to one market may harm such competition in another market by 
anticompetitively foreclosing access to, or significantly raising the price of, 
an important input,(16) or by 
facilitating coordination to increase price or reduce output. When it appears 
that such competition may be adversely affected, the Agencies will follow the 
analysis set forth below. See generally sections 3.4 and 
4.2.
 
3.2      Markets affected by licensing 
arrangements
      Licensing arrangements raise concerns under the 
antitrust laws if they are likely to affect adversely the prices, quantities, 
qualities, or varieties of goods and services(17) either currently or potentially available. The 
competitive effects of licensing arrangements often can be adequately assessed 
within the relevant markets for the goods affected by the arrangements. In such 
instances, the Agencies will delineate and analyze only goods markets. In other 
cases, however, the analysis may require the delineation of markets for 
technology or markets for research and development (innovation 
markets).
 
3.2.1      Goods markets
      A number of different goods markets may be relevant to 
evaluating the effects of a licensing arrangement. A restraint in a licensing 
arrangement may have competitive effects in markets for final or intermediate 
goods made using the intellectual property, or it may have effects upstream, in 
markets for goods that are used as inputs, along with the intellectual property, 
to the production of other goods. In general, for goods markets affected by a 
licensing arrangement, the Agencies will approach the delineation of relevant 
market and the measurement of market share in the intellectual property area as 
in section 1 of the U.S. Department of Justice and Federal Trade Commission 
Horizontal Merger Guidelines.(18)
 
3.2.2      Technology markets
      Technology markets consist of the intellectual 
property that is licensed (the "licensed technology") and its close 
substitutes--that is, the technologies or goods that are close enough 
substitutes significantly to constrain the exercise of market power with respect 
to the intellectual property that is licensed.(19) When rights to intellectual property are 
marketed separately from the products in which they are used,(20) the Agencies may rely on technology markets to 
analyze the competitive effects of a licensing arrangement.
EXAMPLE 2
Situation:
      Firms Alpha and Beta 
independently develop different patented process technologies to manufacture the 
same off-patent drug for the treatment of a particular disease. Before the firms 
use their technologies internally or license them to third parties, they 
announce plans jointly to manufacture the drug, and to assign their 
manufacturing processes to the new manufacturing venture. Many firms are capable 
of using and have the incentive to use the licensed technologies to manufacture 
and distribute the drug; thus, the market for drug manufacturing and 
distribution is competitive. One of the Agencies is evaluating the likely 
competitive effects of the planned venture. 
Discussion: 
      The Agency would analyze 
the competitive effects of the proposed joint venture by first defining the 
relevant markets in which competition may be affected and then evaluating the 
likely competitive effects of the joint venture in the identified markets. 
(See Example 4 for a discussion of the Agencies' approach to joint 
venture analysis.) In this example, the structural effect of the joint venture 
in the relevant goods market for the manufacture and distribution of the drug is 
unlikely to be significant, because many firms in addition to the joint venture 
compete in that market. The joint venture might, however, increase the prices of 
the drug produced using Alpha's or Beta's technology by reducing competition in 
the relevant market for technology to manufacture the drug.
      The Agency would delineate a technology market in 
which to evaluate likely competitive effects of the proposed joint venture. The 
Agency would identify other technologies that can be used to make the drug with 
levels of effectiveness and cost per dose comparable to that of the technologies 
owned by Alpha and Beta. In addition, the Agency would consider the extent to 
which competition from other drugs that are substitutes for the drug produced 
using Alpha's or Beta's technology would limit the ability of a hypothetical 
monopolist that owned both Alpha's and Beta's technology to raise its 
price.
      To identify a technology's close substitutes and thus 
to delineate the relevant technology market, the Agencies will, if the data 
permit, identify the smallest group of technologies and goods over which a 
hypothetical monopolist of those technologies and goods likely would exercise 
market power--for example, by imposing a small but significant and nontransitory 
price increase.(21) The Agencies 
recognize that technology often is licensed in ways that are not readily 
quantifiable in monetary terms. (22) In such circumstances, the Agencies will 
delineate the relevant market by identifying other technologies and goods which 
buyers would substitute at a cost comparable to that of using the licensed 
technology. 
      In assessing the competitive significance of current 
and likely potential participants in a technology market, the Agencies will take 
into account all relevant evidence. When market share data are available and 
accurately reflect the competitive significance of market participants, the 
Agencies will include market share data in this assessment. The Agencies also 
will seek evidence of buyers' and market participants' assessments of the 
competitive significance of technology market participants. Such evidence is 
particularly important when market share data are unavailable, or do not 
accurately represent the competitive significance of market participants. When 
market share data or other indicia of market power are not available, and it 
appears that competing technologies are comparably efficient,(23) the Agencies will assign each technology the 
same market share. For new technologies, the Agencies generally will use the 
best available information to estimate market acceptance over a two-year period, 
beginning with commercial introduction.
 
3.2.3      Research and development: innovation markets
      If a licensing arrangement may adversely affect 
competition to develop new or improved goods or processes, the Agencies will 
analyze such an impact either as a separate competitive effect in relevant goods 
or technology markets, or as a competitive effect in a separate innovation 
market. A licensing arrangement may have competitive effects on innovation that 
cannot be adequately addressed through the analysis of goods or technology 
markets. For example, the arrangement may affect the development of goods that 
do not yet exist.(24) 
Alternatively, the arrangement may affect the development of new or improved 
goods or processes in geographic markets where there is no actual or likely 
potential competition in the relevant goods.(25)
      An innovation market consists of the research and 
development directed to particular new or improved goods or processes, and the 
close substitutes for that research and development. The close substitutes are 
research and development efforts, technologies, and goods(26) that significantly constrain the exercise of 
market power with respect to the relevant research and development, for example 
by limiting the ability and incentive of a hypothetical monopolist to retard the 
pace of research and development. The Agencies will delineate an innovation 
market only when the capabilities to engage in the relevant research and 
development can be associated with specialized assets or characteristics of 
specific firms. 
      In assessing the competitive significance of current 
and likely potential participants in an innovation market, the Agencies will 
take into account all relevant evidence. When market share data are available 
and accurately reflect the competitive significance of market participants, the 
Agencies will include market share data in this assessment. The Agencies also 
will seek evidence of buyers' and market participants' assessments of the 
competitive significance of innovation market participants. Such evidence is 
particularly important when market share data are unavailable or do not 
accurately represent the competitive significance of market participants. The 
Agencies may base the market shares of participants in an innovation market on 
their shares of identifiable assets or characteristics upon which innovation 
depends, on shares of research and development expenditures, or on shares of a 
related product. When entities have comparable capabilities and incentives to 
pursue research and development that is a close substitute for the research and 
development activities of the parties to a licensing arrangement, the Agencies 
may assign equal market shares to such entities.
EXAMPLE 3
Situation:
      Two companies that 
specialize in advanced metallurgy agree to cross-license future patents relating 
to the development of a new component for aircraft jet turbines. Innovation in 
the development of the component requires the capability to work with very high 
tensile strength materials for jet turbines. Aspects of the licensing 
arrangement raise the possibility that competition in research and development 
of this and related components will be lessened. One of the Agencies is 
considering whether to define an innovation market in which to evaluate the 
competitive effects of the arrangement. 
Discussion:
      If the firms that have 
the capability and incentive to work with very high tensile strength materials 
for jet turbines can be reasonably identified, the Agency will consider defining 
a relevant innovation market for development of the new component. If the number 
of firms with the required capability and incentive to engage in research and 
development of very high tensile strength materials for aircraft jet turbines is 
small, the Agency may employ the concept of an innovation market to analyze the 
likely competitive effects of the arrangement in that market, or as an aid in 
analyzing competitive effects in technology or goods markets. The Agency would 
perform its analysis as described in parts 3-5.
      If the number of firms with the required capability 
and incentive is large (either because there are a large number of such firms in 
the jet turbine industry, or because there are many firms in other industries 
with the required capability and incentive), then the Agency will conclude that 
the innovation market is competitive. Under these circumstances, it is unlikely 
that any single firm or plausible aggregation of firms could acquire a large 
enough share of the assets necessary for innovation to have an adverse impact on 
competition.
      If the Agency cannot reasonably identify the firms 
with the required capability and incentive, it will not attempt to define an 
innovation market.
EXAMPLE 4
Situation:      Three of the largest 
producers of a plastic used in disposable bottles plan to engage in joint 
research and development to produce a new type of plastic that is rapidly 
biodegradable. The joint venture will grant to its partners (but to no one else) 
licenses to all patent rights and use of know-how. One of the Agencies is 
evaluating the likely competitive effects of the proposed joint venture.
Discussion:
      The Agency would analyze 
the proposed research and development joint venture using an analysis similar to 
that applied to other joint ventures. (27) The Agency would begin by defining the 
relevant markets in which to analyze the joint venture's likely competitive 
effects. In this case, a relevant market is an innovation market--research and 
development for biodegradable (and other environmentally friendly) containers. 
The Agency would seek to identify any other entities that would be actual or 
likely potential competitors with the joint venture in that relevant market. 
This would include those firms that have the capability and incentive to 
undertake research and development closely substitutable for the research and 
development proposed to be undertaken by the joint venture, taking into account 
such firms' existing technologies and technologies under development, R&D 
facilities, and other relevant assets and business circumstances. Firms 
possessing such capabilities and incentives would be included in the research 
and development market even if they are not competitors in relevant markets for 
related goods, such as the plastics currently produced by the joint venturers, 
although competitors in existing goods markets may often also compete in related 
innovation markets.
      Having defined a relevant innovation market, the 
Agency would assess whether the joint venture is likely to have anticompetitive 
effects in that market. A starting point in this analysis is the degree of 
concentration in the relevant market and the market shares of the parties to the 
joint venture. If, in addition to the parties to the joint venture (taken 
collectively), there are at least four other independently controlled entities 
that possess comparable capabilities and incentives to undertake research and 
development of biodegradable plastics, or other products that would be close 
substitutes for such new plastics, the joint venture ordinarily would be 
unlikely to adversely affect competition in the relevant innovation market 
(cf. section 4.3). If there are fewer than four other independently 
controlled entities with similar capabilities and incentives, the Agency would 
consider whether the joint venture would give the parties to the joint venture 
an incentive and ability collectively to reduce investment in, or otherwise to 
retard the pace or scope of, research and development efforts. If the joint 
venture creates a significant risk of anticompetitive effects in the innovation 
market, the Agency would proceed to consider efficiency justifications for the 
venture, such as the potential for combining complementary R&D assets in 
such a way as to make successful innovation more likely, or to bring it about 
sooner, or to achieve cost reductions in research and development.
      The Agency would also assess the likelihood that the 
joint venture would adversely affect competition in other relevant markets, 
including markets for products produced by the parties to the joint venture. The 
risk of such adverse competitive effects would be increased to the extent that, 
for example, the joint venture facilitates the exchange among the parties of 
competitively sensitive information relating to goods markets in which the 
parties currently compete or facilitates the coordination of competitive 
activities in such markets. The Agency would examine whether the joint venture 
imposes collateral restraints that might significantly restrict competition 
among the joint venturers in goods markets, and would examine whether such 
collateral restraints were reasonably necessary to achieve any efficiencies that 
are likely to be attained by the venture.
 
3.3     Horizontal and vertical relationships
      As with other property transfers, antitrust analysis 
of intellectual property licensing arrangements examines whether the 
relationship among the parties to the arrangement is primarily horizontal or 
vertical in nature, or whether it has substantial aspects of both. A licensing 
arrangement has a vertical component when it affects activities that are in a 
complementary relationship, as is typically the case in a licensing arrangement. 
For example, the licensor's primary line of business may be in research and 
development, and the licensees, as manufacturers, may be buying the rights to 
use technology developed by the licensor. Alternatively, the licensor may be a 
component manufacturer owning intellectual property rights in a product that the 
licensee manufactures by combining the component with other inputs, or the 
licensor may manufacture the product, and the licensees may operate primarily in 
distribution and marketing.
      In addition to this vertical component, the licensor 
and its licensees may also have a horizontal relationship. For analytical 
purposes, the Agencies ordinarily will treat a relationship between a licensor 
and its licensees, or between licensees, as horizontal when they would have been 
actual or likely potential competitors in a relevant market in the absence of 
the license.
      The existence of a horizontal relationship between a 
licensor and its licensees does not, in itself, indicate that the arrangement is 
anticompetitive. Identification of such relationships is merely an aid in 
determining whether there may be anticompetitive effects arising from a 
licensing arrangement. Such a relationship need not give rise to an 
anticompetitive effect, nor does a purely vertical relationship assure that 
there are no anticompetitive effects.
     The following examples illustrate different competitive 
relationships among a licensor and its licensees.
EXAMPLE 5
Situation:      AgCo, a manufacturer of 
farm equipment, develops a new, patented emission control technology for its 
tractor engines and licenses it to FarmCo, another farm equipment manufacturer. 
AgCo's emission control technology is far superior to the technology currently 
owned and used by FarmCo, so much so that FarmCo's technology does not 
significantly constrain the prices that AgCo could charge for its technology. 
AgCo's emission control patent has a broad scope. It is likely that any improved 
emissions control technology that FarmCo could develop in the foreseeable future 
would infringe AgCo's patent.
Discussion:
      Because FarmCo's emission 
control technology does not significantly constrain AgCo's competitive conduct 
with respect to its emission control technology, AgCo's and FarmCo's emission 
control technologies are not close substitutes for each other. FarmCo is a 
consumer of AgCo's technology and is not an actual competitor of AgCo in the 
relevant market for superior emission control technology of the kind licensed by 
AgCo. Furthermore, FarmCo is not a likely potential competitor of AgCo in the 
relevant market because, even if FarmCo could develop an improved emission 
control technology, it is likely that it would infringe AgCo's patent. This 
means that the relationship between AgCo and FarmCo with regard to the supply 
and use of emissions control technology is vertical. Assuming that AgCo and 
FarmCo are actual or likely potential competitors in sales of farm equipment 
products, their relationship is horizontal in the relevant markets for farm 
equipment.
EXAMPLE 6
Situation:      FarmCo develops a new 
valve technology for its engines and enters into a cross-licensing arrangement 
with AgCo, whereby AgCo licenses its emission control technology to FarmCo and 
FarmCo licenses its valve technology to AgCo. AgCo already owns an alternative 
valve technology that can be used to achieve engine performance similar to that 
using FarmCo's valve technology and at a comparable cost to consumers. Before 
adopting FarmCo's technology, AgCo was using its own valve technology in its 
production of engines and was licensing (and continues to license) that 
technology for use by others. As in Example 5, FarmCo does not own or control an 
emission control technology that is a close substitute for the technology 
licensed from AgCo. Furthermore, as in Example 5, FarmCo is not likely to 
develop an improved emission control technology that would be a close substitute 
for AgCo's technology, because of AgCo's blocking patent.
Discussion:
      FarmCo is a consumer and 
not a competitor of AgCo's emission control technology. As in Example 5, 
their relationship is vertical with regard to this technology. The 
relationship between AgCo and FarmCo in the relevant market that includes engine 
valve technology is vertical in part and horizontal in part. It is vertical in 
part because AgCo and FarmCo stand in a complementary relationship, in which 
AgCo is a consumer of a technology supplied by FarmCo. However, the relationship 
between AgCo and FarmCo in the relevant market that includes engine valve 
technology is also horizontal in part, because FarmCo and AgCo are actual 
competitors in the licensing of valve technology that can be used to achieve 
similar engine performance at a comparable cost. Whether the firms license their 
valve technologies to others is not important for the conclusion that the firms 
have a horizontal relationship in this relevant market. Even if AgCo's use of 
its valve technology were solely captive to its own production, the fact that 
the two valve technologies are substitutable at comparable cost means that the 
two firms have a horizontal relationship.
     As in Example 5, the relationship between AgCo and 
FarmCo is horizontal in the relevant markets for farm equipment.
 
3.4      Framework for evaluating licensing 
restraints
      In the vast majority of cases, 
restraints in intellectual property licensing arrangements are evaluated under 
the rule of reason. The Agencies' general approach in analyzing a licensing 
restraint under the rule of reason is to inquire whether the restraint is likely 
to have anticompetitive effects and, if so, whether the restraint is reasonably 
necessary to achieve procompetitive benefits that outweigh those anticompetitive 
effects. See Federal Trade Commission v. Indiana Federation of 
Dentists, 476 U.S. 447 (1986); NCAA v. Board of Regents of the 
University of Oklahoma, 468 U.S. 85 (1984); Broadcast Music, Inc. v. 
Columbia Broadcasting System, Inc., 441 U.S. 1 (1979); 7 Phillip E. Areeda, 
Antitrust Law � 1502 (1986). See also part 4.
      In some cases, however, the courts conclude that a 
restraint's "nature and necessary effect are so plainly anticompetitive" that it 
should be treated as unlawful per se, without an elaborate inquiry into the 
restraint's likely competitive effect. Federal Trade Commission v. Superior 
Court Trial Lawyers Association, 493 U.S. 411, 433 (1990); National 
Society of Professional Engineers v. United States, 435 U.S. 679, 692 
(1978). Among the restraints that have been held per se unlawful are naked 
price-fixing, output restraints, and market division among horizontal 
competitors, as well as certain group boycotts and resale price maintenance. 
      To determine whether a particular restraint in a 
licensing arrangement is given per se or rule of reason treatment, the Agencies 
will assess whether the restraint in question can be expected to contribute to 
an efficiency-enhancing integration of economic activity. See 
Broadcast Music, 441 U.S. at 16-24. In general, licensing arrangements 
promote such integration because they facilitate the combination of the 
licensor's intellectual property with complementary factors of production owned 
by the licensee. A restraint in a licensing arrangement may further such 
integration by, for example, aligning the incentives of the licensor and the 
licensees to promote the development and marketing of the licensed technology, 
or by substantially reducing transactions costs. If there is no 
efficiency-enhancing integration of economic activity and if the type of 
restraint is one that has been accorded per se treatment, the Agencies will 
challenge the restraint under the per se rule. Otherwise, the Agencies will 
apply a rule of reason analysis.
      Application of the rule of reason generally requires a 
comprehensive inquiry into market conditions. (See sections 4.1-4.3.) 
However, that inquiry may be truncated in certain circumstances. If the Agencies 
conclude that a restraint has no likely anticompetitive effects, they will treat 
it as reasonable, without an elaborate analysis of market power or the 
justifications for the restraint. Similarly, if a restraint facially appears to 
be of a kind that would always or almost always tend to reduce output or 
increase prices,(28) and the 
restraint is not reasonably related to efficiencies, the Agencies will likely 
challenge the restraint without an elaborate analysis of particular industry 
circumstances.(29) See 
Indiana Federation of Dentists, 476 U.S. at 459-60; NCAA, 468 
U.S. at 109.
EXAMPLE 7
Situation:      Gamma, which manufactures 
Product X using its patented process, offers a license for its process 
technology to every other manufacturer of Product X, each of which competes 
world-wide with Gamma in the manufacture and sale of X. The process technology 
does not represent an economic improvement over the available existing 
technologies. Indeed, although most manufacturers accept licenses from Gamma, 
none of the licensees actually uses the licensed technology. The licenses 
provide that each manufacturer has an exclusive right to sell Product X 
manufactured using the licensed technology in a designated geographic area and 
that no manufacturer may sell Product X, however manufactured, outside the 
designated territory.
Discussion:      The manufacturers of 
Product X are in a horizontal relationship in the goods market for Product X. 
Any manufacturers of Product X that control technologies that are substitutable 
at comparable cost for Gamma's process are also horizontal competitors of Gamma 
in the relevant technology market. The licensees of Gamma's process technology 
are technically in a vertical relationship, although that is not significant in 
this example because they do not actually use Gamma's technology. 
      The licensing arrangement restricts competition in the 
relevant goods market among manufacturers of Product X by requiring each 
manufacturer to limit its sales to an exclusive territory. Thus, competition 
among entities that would be actual competitors in the absence of the licensing 
arrangement is restricted. Based on the facts set forth above, the licensing 
arrangement does not involve a useful transfer of technology, and thus it is 
unlikely that the restraint on sales outside the designated territories 
contributes to an efficiency-enhancing integration of economic activity. 
Consequently, the evaluating Agency would be likely to challenge the arrangement 
under the per se rule as a horizontal territorial market allocation scheme and 
to view the intellectual property aspects of the arrangement as a sham intended 
to cloak its true nature.
      If the licensing arrangement could be expected to 
contribute to an efficiency-enhancing integration of economic activity, as might 
be the case if the licensed technology were an advance over existing processes 
and used by the licensees, the Agency would analyze the arrangement under the 
rule of reason applying the analytical framework described in this section.
      In this example, the competitive implications do not 
generally depend on whether the licensed technology is protected by patent, is a 
trade secret or other know-how, or is a computer program protected by copyright; 
nor do the competitive implications generally depend on whether the allocation 
of markets is territorial, as in this example, or functional, based on fields of 
use.
 4.      General 
principles concerning the Agencies' evaluation of licensing arrangements under 
the rule of reason 
  
4.1      Analysis of anticompetitive effects
      The existence of anticompetitive effects resulting 
from a restraint in a licensing arrangement will be evaluated on the basis of 
the analysis described in this section.
 
4.1.1      Market structure, coordination, and 
foreclosure
      When a licensing arrangement affects parties in a 
horizontal relationship, a restraint in that arrangement may increase the risk 
of coordinated pricing, output restrictions, or the acquisition or maintenance 
of market power. Harm to competition also may occur if the arrangement poses a 
significant risk of retarding or restricting the development of new or improved 
goods or processes. The potential for competitive harm depends in part on the 
degree of concentration in, the difficulty of entry into, and the responsiveness 
of supply and demand to changes in price in the relevant markets. Cf. 
1992 Horizontal Merger Guidelines 壯 1.5, 3.
      When the licensor and licensees are in a vertical 
relationship, the Agencies will analyze whether the licensing arrangement may 
harm competition among entities in a horizontal relationship at either the level 
of the licensor or the licensees, or possibly in another relevant market. Harm 
to competition from a restraint may occur if it anticompetitively forecloses 
access to, or increases competitors' costs of obtaining, important inputs, or 
facilitates coordination to raise price or restrict output. The risk of 
anticompetitively foreclosing access or increasing competitors' costs is related 
to the proportion of the markets affected by the licensing restraint; other 
characteristics of the relevant markets, such as concentration, difficulty of 
entry, and the responsiveness of supply and demand to changes in price in the 
relevant markets; and the duration of the restraint. A licensing arrangement 
does not foreclose competition merely because some or all of the potential 
licensees in an industry choose to use the licensed technology to the exclusion 
of other technologies. Exclusive use may be an efficient consequence of the 
licensed technology having the lowest cost or highest value.
      Harm to competition from a restraint in a vertical 
licensing arrangement also may occur if a licensing restraint facilitates 
coordination among entities in a horizontal relationship to raise prices or 
reduce output in a relevant market. For example, if owners of competing 
technologies impose similar restraints on their licensees, the licensors may 
find it easier to coordinate their pricing. Similarly, licensees that are 
competitors may find it easier to coordinate their pricing if they are subject 
to common restraints in licenses with a common licensor or competing licensors. 
The risk of anticompetitive coordination is increased when the relevant markets 
are concentrated and difficult to enter. The use of similar restraints may be 
common and procompetitive in an industry, however, because they contribute to 
efficient exploitation of the licensed property.
 
4.1.2      Licensing arrangements involving 
exclusivity
      A licensing arrangement may involve exclusivity in two 
distinct respects. First, the licensor may grant one or more exclusive 
licenses, which restrict the right of the licensor to license others and 
possibly also to use the technology itself. Generally, an exclusive license may 
raise antitrust concerns only if the licensees themselves, or the licensor and 
its licensees, are in a horizontal relationship. Examples of arrangements 
involving exclusive licensing that may give rise to antitrust concerns include 
cross-licensing by parties collectively possessing market power (see 
section 5.5), grantbacks (see section 5.6), and acquisitions of 
intellectual property rights (see section 5.7).
      A non-exclusive license of intellectual property that 
does not contain any restraints on the competitive conduct of the licensor or 
the licensee generally does not present antitrust concerns even if the parties 
to the license are in a horizontal relationship, because the non-exclusive 
license normally does not diminish competition that would occur in its 
absence.
      A second form of exclusivity, exclusive 
dealing, arises when a license prevents or restrains the licensee from 
licensing, selling, distributing, or using competing technologies. See 
section 5.4. Exclusivity may be achieved by an explicit exclusive dealing 
term in the license or by other provisions such as compensation terms or other 
economic incentives. Such restraints may anticompetitively foreclose access to, 
or increase competitors' costs of obtaining, important inputs, or facilitate 
coordination to raise price or reduce output, but they also may have 
procompetitive effects. For example, a licensing arrangement that prevents the 
licensee from dealing in other technologies may encourage the licensee to 
develop and market the licensed technology or specialized applications of that 
technology. See, e.g., Example 8. The Agencies will take into 
account such procompetitive effects in evaluating the reasonableness of the 
arrangement. See section 4.2.
      The antitrust principles that apply to a licensor's 
grant of various forms of exclusivity to and among its licensees are similar to 
those that apply to comparable vertical restraints outside the licensing 
context, such as exclusive territories and exclusive dealing. However, the fact 
that intellectual property may in some cases be misappropriated more easily than 
other forms of property may justify the use of some restrictions that might be 
anticompetitive in other contexts.
      As noted earlier, the Agencies will focus on the 
actual practice and its effects, not on the formal terms of the arrangement. A 
license denominated as non-exclusive (either in the sense of exclusive licensing 
or in the sense of exclusive dealing) may nonetheless give rise to the same 
concerns posed by formal exclusivity. A non-exclusive license may have the 
effect of exclusive licensing if it is structured so that the licensor is 
unlikely to license others or to practice the technology itself. A license that 
does not explicitly require exclusive dealing may have the effect of exclusive 
dealing if it is structured to increase significantly a licensee's cost when it 
uses competing technologies. However, a licensing arrangement will not 
automatically raise these concerns merely because a party chooses to deal with a 
single licensee or licensor, or confines his activity to a single field of use 
or location, or because only a single licensee has chosen to take a 
license.
EXAMPLE 8
Situation:      NewCo, the inventor and 
manufacturer of a new flat panel display technology, lacking the capability to 
bring a flat panel display product to market, grants BigCo an exclusive license 
to sell a product embodying NewCo's technology. BigCo does not currently sell, 
and is not developing (or likely to develop), a product that would compete with 
the product embodying the new technology and does not control rights to another 
display technology. Several firms offer competing displays, BigCo accounts for 
only a small proportion of the outlets for distribution of display products, and 
entry into the manufacture and distribution of display products is relatively 
easy. Demand for the new technology is uncertain and successful market 
penetration will require considerable promotional effort. The license contains 
an exclusive dealing restriction preventing BigCo from selling products that 
compete with the product embodying the licensed technology. 
Discussion:
      This example illustrates 
both types of exclusivity in a licensing arrangement. The license is exclusive 
in that it restricts the right of the licensor to grant other licenses. In 
addition, the license has an exclusive dealing component in that it restricts 
the licensee from selling competing products.
      The inventor of the display technology and its 
licensee are in a vertical relationship and are not actual or likely potential 
competitors in the manufacture or sale of display products or in the sale or 
development of technology. Hence, the grant of an exclusive license does not 
affect competition between the licensor and the licensee. The exclusive license 
may promote competition in the manufacturing and sale of display products by 
encouraging BigCo to develop and promote the new product in the face of 
uncertain demand by rewarding BigCo for its efforts if they lead to large sales. 
Although the license bars the licensee from selling competing products, this 
exclusive dealing aspect is unlikely in this example to harm competition by 
anticompetitively foreclosing access, raising competitors' costs of inputs, or 
facilitating anticompetitive pricing because the relevant product market is 
unconcentrated, the exclusive dealing restraint affects only a small proportion 
of the outlets for distribution of display products, and entry is easy. On these 
facts, the evaluating Agency would be unlikely to challenge the 
arrangement.
 
4.2      Efficiencies and justifications
     If the Agencies conclude, upon an evaluation of the 
market factors described in section 4.1, that a restraint in a licensing 
arrangement is unlikely to have an anticompetitive effect, they will not 
challenge the restraint. If the Agencies conclude that the restraint has, or is 
likely to have, an anticompetitive effect, they will consider whether the 
restraint is reasonably necessary to achieve procompetitive efficiencies. If the 
restraint is reasonably necessary, the Agencies will balance the procompetitive 
efficiencies and the anticompetitive effects to determine the probable net 
effect on competition in each relevant market.
      The Agencies' comparison of anticompetitive harms and 
procompetitive efficiencies is necessarily a qualitative one. The risk of 
anticompetitive effects in a particular case may be insignificant compared to 
the expected efficiencies, or vice versa. As the expected anticompetitive 
effects in a particular licensing arrangement increase, the Agencies will 
require evidence establishing a greater level of expected 
efficiencies.
      The existence of practical and significantly less 
restrictive alternatives is relevant to a determination of whether a restraint 
is reasonably necessary. If it is clear that the parties could have achieved 
similar efficiencies by means that are significantly less restrictive, then the 
Agencies will not give weight to the parties' efficiency claim. In making this 
assessment, however, the Agencies will not engage in a search for a 
theoretically least restrictive alternative that is not realistic in the 
practical prospective business situation faced by the parties. 
      When a restraint has, or is likely to have, an 
anticompetitive effect, the duration of that restraint can be an important 
factor in determining whether it is reasonably necessary to achieve the putative 
procompetitive efficiency. The effective duration of a restraint may depend on a 
number of factors, including the option of the affected party to terminate the 
arrangement unilaterally and the presence of contract terms (e.g., unpaid 
balances on minimum purchase commitments) that encourage the licensee to renew a 
license arrangement. Consistent with their approach to less restrictive 
alternative analysis generally, the Agencies will not attempt to draw fine 
distinctions regarding duration; rather, their focus will be on situations in 
which the duration clearly exceeds the period needed to achieve the 
procompetitive efficiency.
      The evaluation of procompetitive efficiencies, of the 
reasonable necessity of a restraint to achieve them, and of the duration of the 
restraint, may depend on the market context. A restraint that may be justified 
by the needs of a new entrant, for example, may not have a procompetitive 
efficiency justification in different market circumstances. Cf. United 
States v. Jerrold Electronics Corp., 187 F. Supp. 545 (E.D. Pa. 1960), 
aff'd per curiam, 365 U.S. 567 (1961).
 
4.3      Antitrust "safety zone"
      Because licensing arrangements often promote 
innovation and enhance competition, the Agencies believe that an antitrust 
"safety zone" is useful in order to provide some degree of certainty and thus to 
encourage such activity.(30) 
Absent extraordinary circumstances, the Agencies will not challenge a restraint 
in an intellectual property licensing arrangement if (1) the restraint is not 
facially anticompetitive(31) and 
(2) the licensor and its licensees collectively account for no more than twenty 
percent of each relevant market significantly affected by the restraint. This 
"safety zone" does not apply to those transfers of intellectual property rights 
to which a merger analysis is applied. See section 5.7.
      Whether a restraint falls within the safety zone will 
be determined by reference only to goods markets unless the analysis of goods 
markets alone would inadequately address the effects of the licensing 
arrangement on competition among technologies or in research and 
development.
      If an examination of the effects on competition among 
technologies or in research development is required, and if market share data 
are unavailable or do not accurately represent competitive significance, the 
following safety zone criteria will apply. Absent extraordinary circumstances, 
the Agencies will not challenge a restraint in an intellectual property 
licensing arrangement that may affect competition in a technology market 
if (1) the restraint is not facially anticompetitive and (2) 
there are four or more independently controlled technologies in addition to the 
technologies controlled by the parties to the licensing arrangement that may be 
substitutable for the licensed technology at a comparable cost to the user. 
Absent extraordinary circumstances, the Agencies will not challenge a restraint 
in an intellectual property licensing arrangement that may affect competition in 
an innovation market if (1) the restraint is not facially 
anticompetitive and (2) four or more independently controlled entities in 
addition to the parties to the licensing arrangement possess the required 
specialized assets or characteristics and the incentive to engage in research 
and development that is a close substitute of the research and development 
activities of the parties to the licensing agreement.(32)
      The Agencies emphasize that licensing arrangements are 
not anticompetitive merely because they do not fall within the scope of the 
safety zone. Indeed, it is likely that the great majority of licenses falling 
outside the safety zone are lawful and procompetitive. The safety zone is 
designed to provide owners of intellectual property with a degree of certainty 
in those situations in which anticompetitive effects are so unlikely that the 
arrangements may be presumed not to be anticompetitive without an inquiry into 
particular industry circumstances. It is not intended to suggest that parties 
should conform to the safety zone or to discourage parties falling outside the 
safety zone from adopting restrictions in their license arrangements that are 
reasonably necessary to achieve an efficiency-enhancing integration of economic 
activity. The Agencies will analyze arrangements falling outside the safety zone 
based on the considerations outlined in parts 3-5.
      The status of a licensing arrangement with respect to 
the safety zone may change over time. A determination by the Agencies that a 
restraint in a licensing arrangement qualifies for inclusion in the safety zone 
is based on the factual circumstances prevailing at the time of the conduct at 
issue.(33)
5.     Application of general 
principles  
5.0      This 
section illustrates the application of the general principles discussed above to 
particular licensing restraints and to arrangements that involve the 
cross-licensing, pooling, or acquisition of intellectual property. The 
restraints and arrangements identified are typical of those that are likely to 
receive antitrust scrutiny; however, they are not intended as an exhaustive list 
of practices that could raise competitive concerns.
 
5.1      Horizontal restraints
      The existence of a restraint in a licensing 
arrangement that affects parties in a horizontal relationship (a "horizontal 
restraint") does not necessarily cause the arrangement to be anticompetitive. As 
in the case of joint ventures among horizontal competitors, licensing 
arrangements among such competitors may promote rather than hinder competition 
if they result in integrative efficiencies. Such efficiencies may arise, for 
example, from the realization of economies of scale and the integration of 
complementary research and development, production, and marketing 
capabilities.
      Following the general principles outlined in section 
3.4, horizontal restraints often will be evaluated under the rule of reason. In 
some circumstances, however, that analysis may be truncated; additionally, some 
restraints may merit per se treatment, including price fixing, allocation of 
markets or customers, agreements to reduce output, and certain group 
boycotts.
EXAMPLE 9
Situation:      Two of the leading 
manufacturers of a consumer electronic product hold patents that cover 
alternative circuit designs for the product. The manufacturers assign their 
patents to a separate corporation wholly owned by the two firms. That 
corporation licenses the right to use the circuit designs to other consumer 
product manufacturers and establishes the license royalties. None of the patents 
is blocking; that is, each of the patents can be used without infringing a 
patent owned by the other firm. The different circuit designs are substitutable 
in that each permits the manufacture at comparable cost to consumers of products 
that consumers consider to be interchangeable. One of the Agencies is analyzing 
the licensing arrangement. 
Discussion:
      In this example, the 
manufacturers are horizontal competitors in the goods market for the consumer 
product and in the related technology markets. The competitive issue with regard 
to a joint assignment of patent rights is whether the assignment has an adverse 
impact on competition in technology and goods markets that is not outweighed by 
procompetitive efficiencies, such as benefits in the use or dissemination of the 
technology. Each of the patent owners has a right to exclude others from using 
its patent. That right does not extend, however, to the agreement to assign 
rights jointly. To the extent that the patent rights cover technologies that are 
close substitutes, the joint determination of royalties likely would result in 
higher royalties and higher goods prices than would result if the owners 
licensed or used their technologies independently. In the absence of evidence 
establishing efficiency-enhancing integration from the joint assignment of 
patent rights, the Agency may conclude that the joint marketing of competing 
patent rights constitutes horizontal price fixing and could be challenged as a 
per se unlawful horizontal restraint of trade. If the joint marketing 
arrangement results in an efficiency-enhancing integration, the Agency would 
evaluate the arrangement under the rule of reason. However, the Agency may 
conclude that the anticompetitive effects are sufficiently apparent, and the 
claimed integrative efficiencies are sufficiently weak or not reasonably related 
to the restraints, to warrant challenge of the arrangement without an elaborate 
analysis of particular industry circumstances (see section 
3.4).
 
5.2      Resale price maintenance
      Resale price maintenance is illegal when "commodities 
have passed into the channels of trade and are owned by dealers." Dr. Miles 
Medical Co. v. John D. Park & Sons Co., 220 U.S. 373, 408 (1911). It 
has been held per se illegal for a licensor of an intellectual property right in 
a product to fix a licensee's resale price of that product. United 
States v. Univis Lens Co., 316 U.S. 241 (1942); Ethyl Gasoline Corp. v. 
United States, 309 U.S. 436 (1940).(34) Consistent with the principles set forth in 
section 3.4, the Agencies will enforce the per se rule against resale price 
maintenance in the intellectual property context.
 
5.3      Tying arrangements
      A "tying" or "tie-in" or "tied sale" arrangement has 
been defined as "an agreement by a party to sell one product . . . on the 
condition that the buyer also purchases a different (or tied) product, or at 
least agrees that he will not purchase that [tied] product from any other 
supplier." Eastman Kodak Co. v. Image Technical Services, Inc., 112 S. 
Ct. 2072, 2079 (1992). Conditioning the ability of a licensee to license one or 
more items of intellectual property on the licensee's purchase of another item 
of intellectual property or a good or a service has been held in some cases to 
constitute illegal tying.(35) 
Although tying arrangements may result in anticompetitive effects, such 
arrangements can also result in significant efficiencies and procompetitive 
benefits. In the exercise of their prosecutorial discretion, the Agencies will 
consider both the anticompetitive effects and the efficiencies attributable to a 
tie-in. The Agencies would be likely to challenge a tying arrangement if: (1) 
the seller has market power in the tying product,(36) (2) the arrangement has an adverse effect on 
competition in the relevant market for the tied product, and (3) efficiency 
justifications for the arrangement do not outweigh the anticompetitive 
effects.(37) The Agencies will 
not presume that a patent, copyright, or trade secret necessarily confers market 
power upon its owner.
      Package licensing--the licensing of multiple items of 
intellectual property in a single license or in a group of related licenses--may 
be a form of tying arrangement if the licensing of one product is conditioned 
upon the acceptance of a license of another, separate product. Package licensing 
can be efficiency enhancing under some circumstances. When multiple licenses are 
needed to use any single item of intellectual property, for example, a package 
license may promote such efficiencies. If a package license constitutes a tying 
arrangement, the Agencies will evaluate its competitive effects under the same 
principles they apply to other tying arrangements.
 
5.4      Exclusive dealing
      In the intellectual property context, exclusive 
dealing occurs when a license prevents the licensee from licensing, selling, 
distributing, or using competing technologies. Exclusive dealing arrangements 
are evaluated under the rule of reason. See Tampa Electric Co. v. Nashville 
Coal Co., 365 U.S. 320 (1961) (evaluating legality of exclusive dealing 
under section 1 of the Sherman Act and section 3 of the Clayton Act); 
Beltone Electronics Corp., 100 F.T.C. 68 (1982) (evaluating legality of 
exclusive dealing under section 5 of the Federal Trade Commission Act). In 
determining whether an exclusive dealing arrangement is likely to reduce 
competition in a relevant market, the Agencies will take into account the extent 
to which the arrangement (1) promotes the exploitation and development of the 
licensor's technology and (2) anticompetitively forecloses the exploitation and 
development of, or otherwise constrains competition among, competing 
technologies.
      The likelihood that exclusive dealing may have 
anticompetitive effects is related, inter alia, to the degree of foreclosure in 
the relevant market, the duration of the exclusive dealing arrangement, and 
other characteristics of the input and output markets, such as concentration, 
difficulty of entry, and the responsiveness of supply and demand to changes in 
price in the relevant markets. (See sections 4.1.1 and 4.1.2.) If the 
Agencies determine that a particular exclusive dealing arrangement may have an 
anticompetitive effect, they will evaluate the extent to which the restraint 
encourages licensees to develop and market the licensed technology (or 
specialized applications of that technology), increases licensors' incentives to 
develop or refine the licensed technology, or otherwise increases competition 
and enhances output in a relevant market. (See section 4.2 and Example 
8.)
 
5.5      Cross-licensing and pooling 
arrangements
      Cross-licensing and pooling arrangements are 
agreements of two or more owners of different items of intellectual property to 
license one another or third parties. These arrangements may provide 
procompetitive benefits by integrating complementary technologies, reducing 
transaction costs, clearing blocking positions, and avoiding costly infringement 
litigation. By promoting the dissemination of technology, cross-licensing and 
pooling arrangements are often procompetitive.
      Cross-licensing and pooling arrangements can have 
anticompetitive effects in certain circumstances. For example, collective price 
or output restraints in pooling arrangements, such as the joint marketing of 
pooled intellectual property rights with collective price setting or coordinated 
output restrictions, may be deemed unlawful if they do not contribute to an 
efficiency-enhancing integration of economic activity among the participants. 
Compare NCAA 468 U.S. at 114 (output restriction on college 
football broadcasting held unlawful because it was not reasonably related to any 
purported justification) with Broadcast Music, 441 U.S. at 23 
(blanket license for music copyrights found not per se illegal because the 
cooperative price was necessary to the creation of a new product). When 
cross-licensing or pooling arrangements are mechanisms to accomplish naked price 
fixing or market division, they are subject to challenge under the per se rule. 
See United States v. New Wrinkle, Inc., 342 U.S. 371 (1952) (price 
fixing).
      Settlements involving the cross-licensing of 
intellectual property rights can be an efficient means to avoid litigation and, 
in general, courts favor such settlements. When such cross-licensing involves 
horizontal competitors, however, the Agencies will consider whether the effect 
of the settlement is to diminish competition among entities that would have been 
actual or likely potential competitors in a relevant market in the absence of 
the cross-license. In the absence of offsetting efficiencies, such settlements 
may be challenged as unlawful restraints of trade. Cf. United States v. 
Singer Manufacturing Co., 374 U.S. 174 (1963) (cross-license agreement was 
part of broader combination to exclude competitors).
      Pooling arrangements generally need not be open to all 
who would like to join. However, exclusion from cross-licensing and pooling 
arrangements among parties that collectively possess market power may, under 
some circumstances, harm competition. Cf. Northwest Wholesale Stationers, 
Inc. v. Pacific Stationery & Printing Co., 472 U.S. 284 (1985) 
(exclusion of a competitor from a purchasing cooperative not per se unlawful 
absent a showing of market power). In general, exclusion from a pooling or 
cross-licensing arrangement among competing technologies is unlikely to have 
anticompetitive effects unless (1) excluded firms cannot effectively compete in 
the relevant market for the good incorporating the licensed technologies and (2) 
the pool participants collectively possess market power in the relevant market. 
If these circumstances exist, the Agencies will evaluate whether the 
arrangement's limitations on participation are reasonably related to the 
efficient development and exploitation of the pooled technologies and will 
assess the net effect of those limitations in the relevant market. See 
section 4.2.
      Another possible anticompetitive effect of pooling 
arrangements may occur if the arrangement deters or discourages participants 
from engaging in research and development, thus retarding innovation. For 
example, a pooling arrangement that requires members to grant licenses to each 
other for current and future technology at minimal cost may reduce the 
incentives of its members to engage in research and development because members 
of the pool have to share their successful research and development and each of 
the members can free ride on the accomplishments of other pool members. See 
generally United States v. Mfrs. Aircraft Ass'n, Inc., 1976-1 Trade Cas. 
(CCH) � 60,810 (S.D.N.Y. 1975); United States v. Automobile Mfrs. 
Ass'n, 307 F. Supp. 617 (C.D. Cal 1969), appeal dismissed sub nom. City 
of New York v. United States, 397 U.S. 248 (1970), modified sub nom. 
United States v. Motor Vehicle Mfrs. Ass'n, 1982-83 Trade Cas. (CCH) 
� 65,088 (C.D. Cal. 1982). However, such an arrangement can have procompetitive 
benefits, for example, by exploiting economies of scale and integrating 
complementary capabilities of the pool members, (including the clearing of 
blocking positions), and is likely to cause competitive problems only when the 
arrangement includes a large fraction of the potential research and development 
in an innovation market. See section 3.2.3 and Example 4.
EXAMPLE 10
Situation:      As in Example 9, two of 
the leading manufacturers of a consumer electronic product hold patents that 
cover alternative circuit designs for the product. The manufacturers assign 
several of their patents to a separate corporation wholly owned by the two 
firms. That corporation licenses the right to use the circuit designs to other 
consumer product manufacturers and establishes the license royalties. In this 
example, however, the manufacturers assign to the separate corporation only 
patents that are blocking. None of the patents assigned to the corporation can 
be used without infringing a patent owned by the other firm. 
Discussion:
      Unlike the previous 
example, the joint assignment of patent rights to the wholly owned corporation 
in this example does not adversely affect competition in the licensed technology 
among entities that would have been actual or likely potential competitors in 
the absence of the licensing arrangement. Moreover, the licensing arrangement is 
likely to have procompetitive benefits in the use of the technology. Because the 
manufacturers' patents are blocking, the manufacturers are not in a horizontal 
relationship with respect to those patents. None of the patents can be used 
without the right to a patent owned by the other firm, so the patents are not 
substitutable. As in Example 9, the firms are horizontal competitors in the 
relevant goods market. In the absence of collateral restraints that would likely 
raise price or reduce output in the relevant goods market or in any other 
relevant antitrust market and that are not reasonably related to an 
efficiency-enhancing integration of economic activity, the evaluating Agency 
would be unlikely to challenge this arrangement.
 
5.6      Grantbacks
      A grantback is an arrangement under which a licensee 
agrees to extend to the licensor of intellectual property the right to use the 
licensee's improvements to the licensed technology. Grantbacks can have 
procompetitive effects, especially if they are nonexclusive. Such arrangements 
provide a means for the licensee and the licensor to share risks and reward the 
licensor for making possible further innovation based on or informed by the 
licensed technology, and both promote innovation in the first place and promote 
the subsequent licensing of the results of the innovation. Grantbacks may 
adversely affect competition, however, if they substantially reduce the 
licensee's incentives to engage in research and development and thereby limit 
rivalry in innovation markets.
      A non-exclusive grantback allows the licensee to 
practice its technology and license it to others. Such a grantback provision may 
be necessary to ensure that the licensor is not prevented from effectively 
competing because it is denied access to improvements developed with the aid of 
its own technology. Compared with an exclusive grantback, a non-exclusive 
grantback, which leaves the licensee free to license improvements technology to 
others, is less likely to have anticompetitive effects.
      The Agencies will evaluate a grantback provision under 
the rule of reason, see generally Transparent-Wrap Machine Corp. v. Stokes 
& Smith Co., 329 U.S. 637, 645-48 (1947) (grantback provision in 
technology license is not per se unlawful), considering its likely effects in 
light of the overall structure of the licensing arrangement and conditions in 
the relevant markets. An important factor in the Agencies' analysis of a 
grantback will be whether the licensor has market power in a relevant technology 
or innovation market. If the Agencies determine that a particular grantback 
provision is likely to reduce significantly licensees' incentives to invest in 
improving the licensed technology, the Agencies will consider the extent to 
which the grantback provision has offsetting procompetitive effects, such as (1) 
promoting dissemination of licensees' improvements to the licensed technology, 
(2) increasing the licensors' incentives to disseminate the licensed technology, 
or (3) otherwise increasing competition and output in a relevant technology or 
innovation market. See section 4.2. In addition, the Agencies will 
consider the extent to which grantback provisions in the relevant markets 
generally increase licensors' incentives to innovate in the first 
place.
 
5.7      Acquisition of intellectual property 
rights
           Certain transfers of intellectual property rights 
are most appropriately analyzed by applying the principles and standards used to 
analyze mergers, particularly those in the 1992 Horizontal Merger Guidelines. 
The Agencies will apply a merger analysis to an outright sale by an intellectual 
property owner of all of its rights to that intellectual property and to a 
transaction in which a person obtains through grant, sale, or other transfer an 
exclusive license for intellectual property (i.e., a license that precludes all 
other persons, including the licensor, from using the licensed intellectual 
property).(38) Such transactions 
may be assessed under section 7 of the Clayton Act, sections 1 and 2 of the 
Sherman Act, and section 5 of the Federal Trade Commission Act.
EXAMPLE 11
Situation:      Omega develops a new, 
patented pharmaceutical for the treatment of a particular disease. The only drug 
on the market approved for the treatment of this disease is sold by Delta. 
Omega's patented drug has almost completed regulatory approval by the Food and 
Drug Administration. Omega has invested considerable sums in product development 
and market testing, and initial results show that Omega's drug would be a 
significant competitor to Delta's. However, rather than enter the market as a 
direct competitor of Delta, Omega licenses to Delta the right to manufacture and 
sell Omega's patented drug. The license agreement with Delta is nominally 
nonexclusive. However, Omega has rejected all requests by other firms to obtain 
a license to manufacture and sell Omega's patented drug, despite offers by those 
firms of terms that are reasonable in relation to those in Delta's 
license.
Discussion:
      Although Omega's license 
to Delta is nominally nonexclusive, the circumstances indicate that it is 
exclusive in fact because Omega has rejected all reasonable offers by other 
firms for licenses to manufacture and sell Omega's patented drug. The facts of 
this example indicate that Omega would be a likely potential competitor of Delta 
in the absence of the licensing arrangement, and thus they are in a horizontal 
relationship in the relevant goods market that includes drugs for the treatment 
of this particular disease. The evaluating Agency would apply a merger analysis 
to this transaction, since it involves an acquisition of a likely potential 
competitor.
 
6.      Enforcement of invalid intellectual property 
rights
      The Agencies may challenge the enforcement of invalid 
intellectual property rights as antitrust violations. Enforcement or attempted 
enforcement of a patent obtained by fraud on the Patent and Trademark Office or 
the Copyright Office may violate section 2 of the Sherman Act, if all the 
elements otherwise necessary to establish a section 2 charge are proved, or 
section 5 of the Federal Trade Commission Act. Walker Process Equipment, 
Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965) (patents); 
American Cyanamid Co., 72 F.T.C. 623, 684-85 (1967), aff'd sub. 
nom. Charles Pfizer & Co., 401 F.2d 574 (6th Cir. 1968), cert. 
denied, 394 U.S. 920 (1969) (patents); Michael Anthony Jewelers, Inc. 
v. Peacock Jewelry, Inc., 795 F. Supp. 639, 647 (S.D.N.Y. 1992) 
(copyrights). Inequitable conduct before the Patent and Trademark Office will 
not be the basis of a section 2 claim unless the conduct also involves knowing 
and willful fraud and the other elements of a section 2 claim are present. 
Argus Chemical Corp. v. Fibre Glass-Evercoat, Inc., 812 F.2d 1381, 
1384-85 (Fed. Cir. 1987). Actual or attempted enforcement of patents obtained by 
inequitable conduct that falls short of fraud under some circumstances may 
violate section 5 of the Federal Trade Commission Act, American Cyanamid 
Co., supra. Objectively baseless litigation to enforce invalid 
intellectual property rights may also constitute an element of a violation of 
the Sherman Act. See Professional Real Estate Investors, Inc. v. Columbia 
Pictures Industries, Inc., 113 S. Ct. 1920, 1928 (1993) (copyrights); 
Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282, 1289 (9th Cir. 1984), 
cert. denied, 469 U.S. 1190 (1985) (patents); Handgards, Inc. v. 
Ethicon, Inc., 601 F.2d 986, 992-96 (9th Cir. 1979), cert. denied, 
444 U.S. 1025 (1980) (patents); CVD, Inc. v. Raytheon Co., 769 F.2d 842 
(1st Cir. 1985) (trade secrets), cert. denied, 475 U.S. 1016 
(1986). 
  FOOTNOTES 
1.   These Guidelines supersede section 3.6 in 
Part I, "Intellectual Property Licensing Arrangements," and cases 6, 10, 11, and 
12 in Part II of the U.S. Department of Justice 1988 Antitrust Enforcement 
Guidelines for International Operations. [back]   
2.    These Guidelines do not cover the antitrust treatment 
of trademarks. Although the same general antitrust principles that apply to 
other forms of intellectual property apply to trademarks as well, these 
Guidelines deal with technology transfer and innovation-related issues that 
typically arise with respect to patents, copyrights, trade secrets, and know-how 
agreements, rather than with product-differentiation issues that typically arise 
with respect to trademarks. [back]  
3.    As is the case with all guidelines, users should 
rely on qualified counsel to assist them in evaluating the antitrust risk 
associated with any contemplated transaction or activity. No set of guidelines 
can possibly indicate how the Agencies will assess the particular facts of every 
case. Parties who wish to know the Agencies' specific enforcement intentions 
with respect to any particular transaction should consider seeking a Department 
of Justice business review letter pursuant to 28 C.F.R. � 50.6 or a Federal 
Trade Commission Advisory Opinion pursuant to 16 C.F.R. 壯 1.1-1.4. [back]  
4.    See 35 U.S.C. � 154 (1988). Section 
532(a) of the Uruguay Round Agreements Act, Pub. L. No. 103-465, 108 Stat. 4809, 
4983 (1994) would change the length of patent protection to a term beginning on 
the date at which the patent issues and ending twenty years from the date on 
which the application for the patent was filed. [back]  
5.    See 17 U.S.C. � 102 (1988 & Supp. V 
1993). Copyright protection lasts for the author's life plus 50 years, or 75 
years from first publication (or 100 years from creation, whichever expires 
first) for works made for hire. See 17 U.S.C. � 302 (1988). The 
principles stated in these Guidelines also apply to protection of mask works 
fixed in a semiconductor chip product (see 17 U.S.C. � 901 et seq. 
(1988)), which is analogous to copyright protection for works of 
authorship. [back]  
6.    See 17 U.S.C. � 102(b) (1988). [back]  
7.    Trade secret protection derives from state law. 
See generally Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974). [back]  
8.    "[T]he aims and objectives of patent and 
antitrust laws may seem, at first glance, wholly at odds. However, the two 
bodies of law are actually complementary, as both are aimed at encouraging 
innovation, industry and competition." Atari Games Corp. v. Nintendo of 
America, Inc., 897 F.2d 1572, 1576 (Fed. Cir. 1990). [back]  
9.    As with other forms of property, the power to 
exclude others from the use of intellectual property may vary substantially, 
depending on the nature of the property and its status under federal or state 
law. The greater or lesser legal power of an owner to exclude others is also 
taken into account by standard antitrust analysis. [back]  
10.    Market power can be exercised in other economic 
dimensions, such as quality, service, and the development of new or improved 
goods and processes. It is assumed in this definition that all competitive 
dimensions are held constant except the ones in which market power is being 
exercised; that a seller is able to charge higher prices for a higher-quality 
product does not alone indicate market power. The definition in the text is 
stated in terms of a seller with market power. A buyer could also exercise 
market power (e.g., by maintaining the price below the competitive level, 
thereby depressing output). [back]  
11.    The Agencies note that the law is unclear on 
this issue. Compare Jefferson Parish Hospital District No. 2 v. Hyde, 
466 U.S. 2, 16 (1984) (expressing the view in dictum that if a product is 
protected by a patent, "it is fair to presume that the inability to buy the 
product elsewhere gives the seller market power") with id. at 
37 n.7 (O'Connor, J., concurring) ("[A] patent holder has no market power in any 
relevant sense if there are close substitutes for the patented product."). 
Compare also Abbott Laboratories v. Brennan, 952 F.2d 1346, 1354-55 
(Fed. Cir. 1991) (no presumption of market power from intellectual property 
right), cert. denied, 112 S. Ct. 2993 (1992) with Digidyne 
Corp. v. Data General Corp., 734 F.2d 1336, 1341-42 (9th Cir. 1984) 
(requisite economic power is presumed from copyright), cert. denied, 
473 U.S. 908 (1985). [back]  
12.    United States v. Grinnell Corp., 384 
U.S. 563, 571 (1966); see also United States v. Aluminum Co. of 
America, 148 F.2d 416, 430 (2d Cir. 1945) (Sherman Act is not violated by 
the attainment of market power solely through "superior skill, foresight and 
industry"). [back]  
13.    The examples in these Guidelines are 
hypothetical and do not represent judgments about, or analysis of, any actual 
market circumstances of the named industries. [back]  
14.    These Guidelines do not address the possible 
application of the antitrust laws of other countries to restraints such as 
territorial restrictions in international licensing arrangements. [back]  
15.    A firm will be treated as a likely potential 
competitor if there is evidence that entry by that firm is reasonably probable 
in the absence of the licensing arrangement. [back]  
16.    As used herein, "input" includes outlets for 
distribution and sales, as well as factors of production. See, e.g., 
sections 4.1.1 and 5.3-5.5 for further discussion of conditions under which 
foreclosing access to, or raising the price of, an input may harm competition in 
a relevant market. [back] 
 
17.    Hereinafter, the term "goods" also includes 
services. [back]  
18.    U.S. Department of Justice and Federal Trade 
Commission, Horizontal Merger Guidelines (April 2, 1992) (hereinafter "1992 
Horizontal Merger Guidelines"). As stated in section 1.41 of the 1992 Horizontal 
Merger Guidelines, market shares for goods markets "can be expressed either in 
dollar terms through measurement of sales, shipments, or production, or in 
physical terms through measurement of sales, shipments, production, capacity or 
reserves." [back]  
19.    For example, the owner of a process for 
producing a particular good may be constrained in its conduct with respect to 
that process not only by other processes for making that good, but also by other 
goods that compete with the downstream good and by the processes used to produce 
those other goods. [back] 
 
20.    Intellectual property is often licensed, sold, 
or transferred as an integral part of a marketed good. An example is a patented 
product marketed with an implied license permitting its use. In such 
circumstances, there is no need for a separate analysis of technology markets to 
capture relevant competitive effects. [back]  
21.    This is conceptually analogous to the analytical 
approach to goods markets under the 1992 Horizontal Merger Guidelines. 
Cf. � 1.11. Of course, market power also can be exercised in other 
dimensions, such as quality, and these dimensions also may be relevant to the 
definition and analysis of technology markets. [back]  
22.    For example, technology may be licensed 
royalty-free in exchange for the right to use other technology, or it may be 
licensed as part of a package license. [back]  
23.    The Agencies will regard two technologies as 
"comparably efficient" if they can be used to produce close substitutes at 
comparable costs. [back] 
 
24.    E.g., Sensormatic, FTC Inv. 
No. 941-0126, 60 Fed. Reg. 5428 (accepted for comment Dec. 28, 1994); Wright 
Medical Technology, Inc., FTC Inv. No. 951-0015, 60 Fed. Reg. 460 (accepted 
for comment Dec. 8, 1994); American Home Products, FTC Inv. No. 
941-0116, 59 Fed. Reg. 60,807 (accepted for comment Nov. 28, 1994); 
Roche Holdings Ltd., 113 F.T.C. 1086 (1990); United States 
v. Automobile Mfrs. Ass'n, 307 F. Supp. 617 (C.D. Cal. 1969), appeal 
dismissed sub nom. City of New York v. United States, 397 U.S. 248 (1970), 
modified sub nom. United States v. Motor Vehicles Mfrs. Ass'n, 1982-83 
Trade Cas. (CCH) � 65,088 (C.D. Cal. 1982). [back]  
25.    See Complaint, United States v. 
General Motors Corp., Civ. No. 93-530 (D. Del., filed Nov. 16, 1993). [back]  
26.    For example, the licensor of research and 
development may be constrained in its conduct not only by competing research and 
development efforts but also by other existing goods that would compete with the 
goods under development. [back]  
27.    See, e.g., U.S. Department of Justice 
and Federal Trade Commission, Statements of Enforcement Policy and Analytical 
Principles Relating to Health Care and Antitrust 20-23, 37-40, 72-74 (September 
27, 1994). This type of transaction may qualify for treatment under the National 
Cooperative Research and Production Act of 1993, 15 U.S.C.A 壯 4301-05. [back]  
28.    Details about the Federal Trade Commission's 
approach are set forth in Massachusetts Board of Registration in 
Optometry, 110 F.T.C. 549, 604 (1988). In applying its truncated rule of 
reason inquiry, the FTC uses the analytical category of "inherently suspect" 
restraints to denote facially anticompetitive restraints that would always or 
almost always tend to decrease output or increase prices, but that may be 
relatively unfamiliar or may not fit neatly into traditional per se categories. 
[back]  
29.    Under the FTC's Mass. Board approach, 
asserted efficiency justifications for inherently suspect restraints are 
examined to determine whether they are plausible and, if so, whether they are 
valid in the context of the market at issue. Mass. Board, 110 F.T.C. at 
604. [back]  
30.    The antitrust "safety zone" does not apply to 
restraints that are not in a licensing arrangement, or to restraints that are in 
a licensing arrangement but are unrelated to the use of the licensed 
intellectual property. [back]  
31.    "Facially anticompetitive" refers to restraints 
that normally warrant per se treatment, as well as other restraints of a kind 
that would always or almost always tend to reduce output or increase prices. 
See section 3.4. [back]  
32.    This is consistent with congressional intent in 
enacting the National Cooperative Research Act. See H.R. Conf. Rpt. No. 
1044, 98th Cong., 2d Sess., 10, reprinted in 1984 U.S.C.C.A.N. 3105, 
3134-35. [back]  
33.    The conduct at issue may be the transaction 
giving rise to the restraint or the subsequent implementation of the restraint. 
[back]  
34.    But cf. United States v. General Electric 
Co., 272 U.S. 476 (1926) (holding that an owner of a product patent may 
condition a license to manufacture the product on the fixing of the first 
sale price of the patented product). Subsequent lower court decisions have 
distinguished the GE decision in various contexts. See, e.g., Royal 
Indus. v. St. Regis Paper Co., 420 F.2d 449, 452 (9th Cir. 1969) (observing 
that GE involved a restriction by a patentee who also manufactured the 
patented product and leaving open the question whether a nonmanufacturing 
patentee may fix the price of the patented product); Newburgh Moire Co. v. 
Superior Moire Co., 237 F.2d 283, 293-94 (3rd Cir. 1956) (grant of multiple 
licenses each containing price restrictions does not come within the GE 
doctrine); Cummer-Graham Co. v. Straight Side Basket Corp., 142 F.2d 
646, 647 (5th Cir.) (owner of an intellectual property right in a process to 
manufacture an unpatented product may not fix the sale price of that product), 
cert. denied, 323 U.S. 726 (1944); Barber-Colman Co. v. National 
Tool Co., 136 F.2d 339, 343-44 (6th Cir. 1943) (same). [back]  
35.    See, e.g., United States v. Paramount 
Pictures, Inc., 334 U.S. 131, 156-58 (1948) (copyrights); International 
Salt Co. v. United States, 332 U.S. 392 (1947) (patent and related 
product). [back]  
36.    Cf. 35 U.S.C. � 271(d) (1988 & 
Supp. V 1993) (requirement of market power in patent misuse cases involving 
tying). [back]  
37.    As is true throughout these Guidelines, the 
factors listed are those that guide the Agencies' internal analysis in 
exercising their prosecutorial discretion. They are not intended to circumscribe 
how the Agencies will conduct the litigation of cases that they decide to bring. 
[back]  
38.    The safety zone of section 4.3 does not 
apply to transfers of intellectual property such as those described in this 
section. [back]
US Antitrust Guidelines 
 
 
 
          
      
 
  
 
 
 
 
 
 
 
 
 
 
 
沒有留言:
張貼留言