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

Stephen M. Maurer and Suzanne Scotchmer

No 10546, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: For over a century, courts and commentators have struggled to find principles that reconcile patent and antitrust law, especially as to patent licensing. We interpret case law and commentary to arrive at three unifying principles for acceptable terms of license. Profit neutrality' holds that patent rewards should not depend on the rightholder's ability to work the patent himself. Derived reward' holds that the patent holder's profits should be earned, if at all, from the social value created by the invention. Minimalism' holds that licensing contracts should not contain more restrictions than are necessary to achieve neutrality. We argue that these principles largely rationalize important decisions of the twentieth century. They also justify the Supreme Court's controversial General Electric decision, which holds that patentholders can set prices charged by their licensees.

JEL-codes: K21 L12 (search for similar items in EconPapers)
Date: 2004-06
New Economics Papers: this item is included in nep-com and nep-law
Note: LE PR
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published as Maurer, S. and S. Scotchmer. "Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law." American Law and Economics Review 8: 476-522. 2006.

Downloads: (external link)
http://www.nber.org/papers/w10546.pdf (application/pdf)

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
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:10546

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10546

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().