Broad Patent Cross-Licensing Agreement


The IP antitrust guidelines define a subsidy as an agreement by which a taker grants the donor the “right to use the improvements made by the taker to the technology granted.” (153) However, according to panelists and commentators, licensees may continue to define a donor`s scope to “cover inventions that somehow relate to the purpose of the licensed patent” (154), or even inventions that have nothing to do with the technology conceded. (155) Some participants found that widely written grants can discourage innovation by reducing the returns available to the innovator. (156) Of particular concern to some participants in the debate is the extent of the rights to be returned to the licensee and whether the innovator retains the right to license to others. (157) 25. Ip Guidelines for Cartels and Abuse of Dominant Position 2.3; see also Richard Gilbert and Carl Shapiro, Antitrust Issues in the Licensing of Intellectual Property: The Nine No-No`s Meet the Nineties, 1997 Brookings Papers on Econ. Activity, Microeconomics 283, 325-26 (finding that compiling complementary patents improves their use, which in turn generates efficiency gains). Roundtable participants also discussed various tests to determine whether a patent is essential to a standard or technology. They found that each of the pools that received a business evaluation letter from the division used a slightly different relevance test. According to one panelist, the “economic test” of DVD pools is more effective than the “technically essential test” of the MPEG-2 pool for licensees and should therefore be preferred by the cartel guardians. (114) Another participant found that one of the two definitions was acceptable and that few competition issues would be asked as long as each definition was applied accurately. (115) A third participant found that the practical implementation of the different definitions of essentiality was “fairly equal.” (116) Among the criteria by which a patent must contain a claim essential to the implementation of the standard, some participants in the debate described it as an effective means of ensuring that the contented patents are not substitutes. (117) According to one panelist, if no standard has been established, it should be sufficient to define a clear and limited scope for the licensing of a pool to determine whether the patents contained are complements or substitutes and to “assess the competitive impact of a pool.”