Patterson, Mark R. --- "The Competitive Effects of Patent Field-of-Use Licences" [2008] ELECD 249; in Drexl, Josef (ed), "Research Handbook on Intellectual Property and Competition Law" (Edward Elgar Publishing, 2008)

Book Title: Research Handbook on Intellectual Property and Competition Law

Editor(s): Drexl, Josef

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845420475

Section: Chapter 7

Section Title: The Competitive Effects of Patent Field-of-Use Licences

Author(s): Patterson, Mark R.

Number of pages: 39

Extract:

7 The competitive effects of patent
field-of-use licences*
Mark R. Patterson



1 Introduction
A common patent licensing technique is the field-of-use licence, under which
the patentee grants the right to use the patented invention, but only in a specified
way. In both the EU and the United States, the competition agencies view field-
of-use licensing as generally pro-competitive, because the ability to provide
different licensing terms for different users can encourage broader licensing of
inventions.1 For example, the US Supreme Court has upheld a field-of-use
licensing arrangement under which several patentees licensed third parties to
manufacture audio amplifiers using their patented technologies, but only for
home use.2 This arrangement allowed the patentees to reserve the right to manu-
facture for commercial use, which was apparently more profitable, while still
allowing the technologies to be used broadly for home applications. If licensing
had required the patentees to share the commercial business as well, they might
not have licensed the technologies for home use at all.
However field-of-use licensing need not always be pro-competitive. The
anti-competitive concerns can be especially great when the patentee imposes
restrictions on the ultimate purchasers of the patented products rather than on


* This Chapter was written before the recent US Supreme Court decision in
Quanta Computer, Inc. v. LG Electronics, Inc. (June 2008).
1 See, for example, Commission Notice: Guidelines on the application of
Article 81 of the EC Treaty to technology transfer ...