Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law

Stephen M. Maurer and Suzanne Scotchmer

Competition Policy Center, Working Paper Series from Competition Policy Center, Institute for Business and Economic Research, UC Berkeley

Abstract: From the antitrust case law that governs restrictions on patent licenses, we derive three unifying principles: just reward, profit neutrality and minimalism. The just-reward principle holds that the patentholder's profits should be earned, if at all, from the social value created by his invention. Profit neutrality holds that patent rewards should not depend on the rightholder's ability to work the patent himself. Minimalism holds that licensing contracts should not use more restrictive terms than required for neutrality. We discuss how these principles determine which patent license restrictions should and should not be acceptable from an antitrust perspective. We also compare these principles and the per se rules that follow from them to the potential benefits and drawbacks likely to be encountered under a rule of reason approach.

Keywords: antitrust; patents; price fixing; licensing (search for similar items in EconPapers)
Date: 2004-02-08
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law (2006)
Working Paper: Profit Neutrality in Licensing: The Boundary between Antitrust Law and Patent Law (2004)
Working Paper: Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law (2004)
Working Paper: Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law
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