IP rights, which create temporary exclusive rights that protect investments in research and some creative activities, have taken on an increasingly prominent and extensive role in economic activity – and in market competition as well. As the economy digitalises and the importance of intangible assets in the overall economy increases, the relevance of the interaction between competition and IP law has grown.
One important way through which IP-protected innovations can diffuse throughout the economy is licensing. The existence of technology markets in which IP owners can license their innovations efficiently and at attractive terms is likely to have a positive effect on their incentives to invest in innovation. Licensing contracts are generally thought to be procompetitive, fostering both competition ex post and innovation ex ante. Nonetheless, there are a number of circumstances and types of licensing arrangements that give rise to competition concerns. Some of these concerns were addressed in a couple of OECD Recommendations, the last of which was adopted in 1989. Since then, a number of new competition concerns related to licensing have arisen and created debate and controversy within the competition community. These include patent thickets, technological standards, standard essential patents (SEP), the setting of fair, reasonable and non-discriminatory (FRAND) licensing royalties, and compulsory licensing as both an antitrust infringement and remedy.
In June 2019, the OECD held a roundtable to study an overview of legal and economic developments in recent years as regards the treatment of the licensing by competition law and policy, with a focus on areas where the role of competition law is controversial. The goal was to understand how the analysis of IP licensing practices’ anti- and pro-competitive effects can be refined, and identify points on international convergence and disagreement as regards IP licensing.