Appendix A. Antitrust Guidelines for the Licensing of Intellectual Property

• Pages: 315-352

315

appendix A

Antitrust Guidelines

fortheLicensing

ofIntellectual Property

Antitrust Guidelines

for the Licensing of

Intellectual Property

Issued by the

U.S. Department of Justice

and the

Federal Trade Commission

January12, 2017

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APPENDIX A

316

i

Table of Contents

1 Intellectual Property Protection and the Antitrust Laws........................................................................... 1

2 General Principles...................................................................................................................................... 2

2.1 Standard Antitrust Analysis Applies to Intellectual Property............................................................. 3

2.2 Intellectual Property and Market Power............................................................................................ 4

2.3 Procompetitive Benefits of Licensing.................................................................................................. 5

3 Antitrust Concerns and Modes of Analysis................................................................................................ 7

3.1 Nature of the Concerns....................................................................................................................... 7

3.2 Markets Affected by Licensing Arrangements.................................................................................... 8

3.2.1 Goods Markets............................................................................................................................. 8

3.2.2 Technology Markets..................................................................................................................... 9

3.2.3 Research and Development Markets.........................................................................................11

3.3 Horizontal and Vertical Relationships...............................................................................................14

3.4 Framework for Evaluating Licensing Restraints................................................................................16

4 General Principles Concerning the Agencies’ Evaluation of Licensing Arrangements under the Rule of

Reason.........................................................................................................................................................19

4.1 Analysis of Anticompetitive Effects..................................................................................................19

4.1.1 Market Structure, Coordination, and Foreclosure.....................................................................19

4.1.2 Licensing Arrangements Involving Exclusivity............................................................................20

4.2 Efficiencies and Justifications............................................................................................................23

4.3 Antitrust “Safety Zone”.....................................................................................................................24

5 Application of General Principles.............................................................................................................26

5.1 Horizontal Restraints.........................................................................................................................26

5.2 Price Maintenance............................................................................................................................27

5.3 Tying Arrangements..........................................................................................................................28

5.4 Exclusive Dealing...............................................................................................................................29

5.5 Cross-Licensing and Pooling Arrangements......................................................................................30

5.6 Grantbacks........................................................................................................................................33

5.7 Acquisition of Intellectual Property Rights.......................................................................................34

6 Invalid or Unenforceable Intellectual Property Rights............................................................................35

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Antitrust Guidelines fortheLicensing ofIntellectual Property317

1

1 Intellectual Property Protection and the Antitrust Laws

1.0These 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.1By 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 discretionin antitrust law enforcement. The

Agencies will evaluate each case in light of its own facts and apply these Guidelines reasonably

and flexibly.2

In the United States, patents confer rights to exclude others from making, using, or selling in the

United States the invention claimed by the patentfor a set period of time.3To gain patent

protection, an invention (which may be a product, process, machine, or com position of matter)

must be novel,4nonobvious,5useful,6and sufficiently disclosed.7Copyright protection applies to

original works of authorship fixed in a tangible medium of expression.8 Copyrightprotection

applies only tothe expression, not the underlying ideas. 9Unlike a patent, which protects an

invention not only from copying but also from subsequent independent cre ationby others, a

1These Guidelines replace the “Antitrust Guidelines for the Licensing of Intellectual Property” issued on April 6,

1995, by the U.S. Department of Justice and the Federal Trade Commission. Theydo 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, tradesecrets, and know-how agreements, rather than with

product-differentiation issues that typica lly arise with respect to trademarks.

2As is the case with all guidelines, users should rely on qualified counsel to assist them in evaluating the antitrust

riskassociated with any contemplated transaction or activity. No set of guidelines can possibly indicate how the

Agencies will assess the particul ar facts of every case. Parties who wish to know the Ag encies’ specific enforcement

intentions with respect to any particular transaction in which they are involved should consider seeking a

Department of Justice business review letter pursuant to 28 C.F.R. § 50.6 or a Fed eral Trade Commission Advisory

Opinion pursuant to 16 C.F.R. §§1.1-1.4.

3See, e.g., 35 U.S.C.§ 154(a)(2), (c)(1) (2012); id. § 173.

4See id. § 102.

5See id.§ 103.

6Seeid. § 101.

7See id. § 112.

8See 17 U.S.C. § 102 (2012). Copyright protection lasts for a set period of time. See id. § 302(a), (c). The principles

stated in these Guidelines also apply to protection of mask works fixed in a semiconductor chip product (see id.

§§901-914), which is analogous to copyright protection for works of authorship.

9See id.§ 102(b). Copyright protection extends to literary works, musical works, dramatic works, pantomimes and

choreographic works, pictorial, graphic and sculptural works, motion pictures and other audiovisual works, sound

recordings, and architectural works. Id. § 102(a).

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