Converging Doctrines? US and EU Antitrust Policy for the Licensing of Intellectual Property

Intellectual Property and Competition Policy and Antitrust

Article Snapshot


Richard Gilbert


Antitrust, Vol. 19, No. 1, Fall 2004, pp. 51-57


This paper compares the laws of Europe (EU) and the United States (US) on intellectual property and competition.

Policy Relevance

EU regulators should relax the EC Technology Transfer Block Exemption Regulations somewhat to bring them closer to US rules. Licensing often benefits consumers.

Main Points

  • Competition law in the US and in the EU regulates firms that agree to license patents or other intellectual property to other firms. Both recognize:
    • That licensing is often beneficial, especially if it does not fix prices or reduce product output.
    • That exclusive licenses can help speed adoption of new technology.

  • But the US and EU policies are very different. US rules focus what competition would look without the license, especially competition from different technologies. The EU also looks at competition between firms using the licensed technology.

  • EU law is more hostile to exclusive licensing, and the firms involved must prove it is reasonable. The EU assumes that without the license, innovation would be shared.
    • Seeing exclusive licenses as restraining trade is not correct. The license enables the licensee to trade.
    • Without freedom to price and make licenses exclusive and otherwise control his risk, inventors might be discouraged from investing in innovation.

  • Licenses can run between competitors or noncompetitors, and can be reciprocal or not. In the EU, between competitors, some licenses are allowed only if nonreciprocal. These would also be allowed in the United States. The semiconductor sector relies on these.

  • Both the US and the EU often exempt licenses when the firms have low market share. Market share is hard to define. Do potato chips compete only with other chips, or with all snacks?

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