Appendix 1. 1995 Department of Justice and Federal Trade Commission Antitrust Guidelines for the Licensing of Intellectual Property

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.1 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.2
1. 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.
2. 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.
§§ 1.1-1.4.
422 Intellectual Property and Antitrust Handbook
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.3 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.4 A copyright protects
only the expression, not the underlying ideas.5 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.6 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.7 The intellectual property laws provide incentives for
3. 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.
4. 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.
5. See 17 U.S.C. § 102(b) (1988).
6. Trade secret protection derives from state law. See generally Kewanee
Oil Co. v. Bicron Corp., 416 U.S. 470 (1974).
7. “[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
1995 IP Guidelines 423
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: (a) for the
purpose of antitrust analysis, the Agencies regard intellectual property as
being essentially comparable to any other form of property; (b) the
Agencies do not presume that intellectual property creates market power
in the antitrust context; and (c) 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.8
and competition.” Atari Games Corp. v. Nintendo of America, Inc., 897
F.2d 1572, 1576 (Fed. Cir. 1990).
8. 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

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