Another panelist urged the Agencies to more strictly enforce the limitations on grantbacks articulated in the business review letters, in particular those that cover unrelated technologies, future patents, and nonessential patents. Returns can be based on fixed fees or running royalties. For example, a by the Toulouse School of Economics says cross-licensing accounts for 50% of all licensing arrangements in the telecommunications and broadcasting industry, 25% in the electronic components sector, and 23% in the pharmaceutical industry. The Agencies generally review portfolio cross licenses under the rule of reason. For example, there may be an anticompetitive risk in a pool containing substitute patents. Existing pools have used several mechanisms to keep these types of information confidential.
Smith School of Business, University of Maryland; Jonathan D. For example, few earlier opinions give significant weight to the relationships among the patents in the pool, whereas modern economic analysis of patent pools examines whether the patent rights in the pool are complements or substitutes for one another. Such a concern could arise, for example, if competitors in a market entered into a sham cross-licensing arrangement in which each participant agreed to pay every other participant a large per unit licensing fee. If only it were that simple. The expression is used in this opinion to convey the idea of a linking of the right to use patents issued to more than one patentee. There is probably a deal involving a collection of actually interesting patents at the bottom of this, but a grab-bag cross-licensing deal is bound to involve a lot of iffy stuff as well. At the time the Department issued the 3G Business Review Letter, there were five different 3G technologies rather than a single standard, which was the case in the patent pools discussed above.
Panelists addressing this topic at the April 17, 2002 Hearing included: Garrard R. See Grindley Presentation at 6. Allowing independent licensing outside the pool, however, permits innovators that invent around one or more pool patents to compete with the pool. A competitive concern would arise, however, if decisions on licensing outside a pool were part of a concerted attempt by the pool's licensors to hinder the ability of others outside the pool to offer a competitive product or process. The bargaining power of the two parties involved in a licensing agreement is often dependent on the nature of the product.
It is necessary, however, for anti-trust, anti-collusion regulators, and other patent litigation bodies to keep a watchful eye on the larger and broader cross-licensing agreements to ensure that healthy competition is upheld. Barton, Patents and Antitrust: A Rethinking in Light of Patent Breadth and Sequential Innovation, 65 Antitrust L. Determining the competitive significance of the exclusive nature of licenses granted to the pool thus depends on the specific facts of the case. Provisions in portfolio cross licenses that may facilitate price fixing, for example, can raise antitrust concerns. When these individually priced licensing fees are stacked together they can represent a significant cost of production.
Intel spokesman Chuck Mulloy also declined to comment on the terms of the deal, or its provisions. According to panelists, this simplified approach to licensing can enable more rapid development and adoption of new technologies than could be achieved with cross licensing alone. Intel chief executive Paul Otellini said in a conference call that Intel already followed those provisions, and there would be no change in Intel's behaviour as a result. And if that claim is found to be essential, then I believe the letter issued by the evaluator says that this patent is then essential to the standard. For example, obtaining a pool license may be less costly than negotiating separate licenses with each patent owner.
The distinction between complementary and substitutable goods arises from a perspective of consumer demand. The licensing party may agree that the image can be used, but may include certain restrictions in the agreement: that the image not be included in specific advertising campaigns, for example, or that new fees must be paid with every 10,000 copies sold. The Department expected the 3G platform proposal to deliver somewhat fewer licensing efficiencies because the patent rights would not be integrated into a single bundle. Indeed, the pooling proposals reviewed by the Department contained mechanisms designed to narrow grantbacks, making them more likely to be procompetitive. Grindley Presentation at 10; see also Feb.
Dep't of Justice, to Garrard R. In this way, licensees are not required to purchase access to more technology than they need. More appealing, but less likely as Microsoft will want to develop their own product. The pool issued no third-party licenses over its six year existence. As a result, the total burden of all royalty payments may be higher than if a single royalty is demanded by a monopolist of all patents essential to the production of a final product. It is also possible to introduce clauses that limit direct competition between the two cross-licensing partners. In short, a pool containing complementary patents, i.
I can imagine the patent saying something like this: Provides an interface to display a single line of text, including but not limited to letters and providing for the ability to set said text on a line of its own with no other output present. To the extent that the number of licensors in the pool is very large, large being a number, say, greater than four. If it is clear that the parties could have achieved similar efficiencies by means that are significantly less restrictive, then the Agencies will not give weight to the parties' efficiency claim. Ordover, A Patent System for Both Diffusion and Exclusion, J. First, horizontal coordination among the pool's licensors could lead to a reduction in price competition among downstream products. The Agencies also do not presume market power derives from a cross-licensing agreement or patent pool because there may be viable alternatives to participation in the licensing agreement that would preclude the assertion of market power. Of particular concern to some panelists is the scope of the rights to be granted back to the licensor and whether the innovator retains the right to license to others.
Intel competes with its licensees in the market for Intel-compatible chipsets. If properly determined, essentiality should guarantee that the patents in the pool are complements. Participants discussed a number of topics, including the similarities and differences between pooling and cross-licensing agreements, the potential procompetitive benefits and anticompetitive effects of pools and cross licenses, and the safeguards that have been proposed to help ensure that patent pools do not harm competition. Morse Submission at 8; see also Michael R. Contents of the agreement will not be disclosed. This results in a dramatic reduction in over-sprays, water use, and overall handling, while at the same time effectively protecting the crop and thus increasing crop productivity.