Introduction

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Chapter I

INTRODUCTION

Licensing of intellectual property frequently crosses international

boundaries. It is becoming ever more commonplace for intellectual

property owners to seek to secure their rights in key jurisdictions around

the world. Various international treaties, most particularly the agreement

creating the World Intellectual Property Organization, facilitated the

protection of intellectual property rights in multiple jurisdictions around

the world. As measures to protect intellectual property in multiple

jurisdictions have become commonplace, so too have cross-border

licensing agreements. A single licensing agreement often governs use of

IP rights in multiple jurisdictions, maybe even throughout the world. As

a result, a restriction in a single licensing agreement may have effects in

many countries around the world.

Competition law, by contrast, remains largely national in focus.

Each country (or jurisdiction, in the case of the European Union) applies

its laws to conduct having effects within its territory. A single restraint

with effects in multiple jurisdictions may be subject to the competition

laws of several countries. Furthermore, despite significant progress in

reducing inconsistencies among various national laws, substantial

differences remain. Common licensing issues, such as package licensing

and grantbacks, can be handled very differently by regulatory authorities

in various countries. Thus, a single restraint may be found to violate the

competition laws of one jurisdiction but not those of another.

In recent years, a number of cases involving application of national

competition law to cross-border IP licensing practices have captured

attention. Microsoft’s practices of tying and integrating various types of

software have subjected it to sanctions under the antitrust and

competition laws of the United States, the European Union, Japan and

Korea, although the various jurisdictions did not challenge the same

tying and integration practices. In the United States, both the Federal

Trade Commission (FTC) and private litigants challenged Intel’s practice

of refusing to supply certain copyright-protected product information

unless the recipients agreed to license certain patent rights both to Intel

and to Intel’s customers on favorable terms. No other jurisdiction

challenged Intel’s practices. More recently, the Japan Fair Trade

Commission challenged similar practices of Microsoft and Qualcomm.