It’s Unfair! Non-price Exploitation in ICT Patents Licenses

Abstract

This paper analyses controversial patent licensing conditions in the Information Communication Technology (ICT) sector as “unfair trading conditions” under Art. 102(a) TFEU. It argues that the application of the Technology Transfer Block Exemption Regulation does not prevent the assessment of patent licensing conditions under Art. 102 if the licensor is dominant in the market. Hence, the article examines four categories of controversial licensing conditions in the light of the case law of the Court of Justice of the European Union under Art. 102(a): grant-back clauses, no-challenge clauses, portfolio-wide licenses, and contract term decoupled from patent validity. Developing old precedents in new application cases, the abuse-of-dominance analysis finds that each license clause is capable of anti-competitive exploitative effects, as much as offsetting justifications. As a result, the qualification of any such clause as “unfair” needs a case-by-case approach considering the overall content of the ICT patent licensing agreement. Whether the overall efficiencies outweigh the anti-competitive effects is always a question of degree. Nonetheless, this article contributes to legal predictability by identifying the opposing economic arguments of dominant patent licensors and complaining licensees. It concludes that both parties have strings to their bows.