TY  - JOUR
AU  - Maurer,Stephen M.
AU  - Scotchmer,Suzanne
TI  - Profit Neutrality in Licensing: The Boundary between Antitrust Law and Patent Law
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10546
PY  - 2004
Y2  - June 2004
UR  - http://www.nber.org/papers/w10546
L1  - http://www.nber.org/papers/w10546.pdf
N1  - Author contact info:
Suzanne Scotchmer
Department of Economics
Evans Hall
University of California
Berkeley, CA  94720-3880
Tel: 510/643-8562
Fax: 510/643-9657
E-Mail: scotch@berkeley.edu
AB  - For over a century, courts and commentators have struggled to find principles that reconcile patent and antitrust law, especially as to patent licensing. We interpret case law and commentary to arrive at three unifying principles for acceptable terms of license.  Profit neutrality' holds that patent rewards should not depend on the rightholder's ability to work the patent himself.  Derived reward' holds that the patent holder's profits should be earned, if at all, from the social value created by the invention.  Minimalism' holds that licensing contracts should not contain more restrictions than are necessary to achieve neutrality. We argue that these principles largely rationalize important decisions of the twentieth century. They also justify the Supreme Court's controversial General Electric decision, which holds that patentholders can set prices charged by their licensees.
ER  -