Competition Law meets IP Licensing – How to Shoot oneself in the Foot


Although owners of intellectual property rights are afforded exclusive rights of exploitation, freedom to exercise those rights may be limited by unfair competition laws. In particular, rules prohibiting anti-competitive agreements may impact on an IP owners’ ability to enter into licensing agreements.

In some circumstances, a licence agreement may require royalty payments to be made for technologies over which patents have expired or otherwise have been found invalid. Such provision may be desired, for example, where the licensed technology needs long-term development before a product will be marketed, or may be stipulated by a licensor who holds significant bargaining power. Given the potential for competition laws to interfere with such agreements, their lawfulness must be considered under the relevant competition provisions to ensure they are valid and enforceable.

The following article highlights aspects of this, starting from a European point of view, with outlooks to a similar situation in the USA and in Singapore.

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