Unilateral Refusals to License
Publication Date:March 11, 2006
Most antitrust claims relating to intellectual property involve challenges to agreements, licensing practices, or affirmative conduct involving the use or disposition of the intellectual property rights or the products they cover. However, sometimes an antitrust claim centers on an intellectual property owner's refusal to use or license an intellectual property right, perhaps coupled with efforts to enforce the intellectual property right against infringers. The allegation may be that the intellectual property right is so essential to competition that it must be licensed across the board, or that a refusal to license it to one particular party was discriminatory, or that in context a refusal to license helped a monopolist to acquire or maintain market power. Claims based on a unilateral refusal to license present important issues at the center of the tension between antitrust and intellectual property. Unilateral refusal to license cases cut to the heart of the intellectual property owner's right to exclude others from practising the intellectual property. As such, efforts to invoke antitrust law in this context deserve special scrutiny. We examine the basic principles relating to unilateral refusals to license intellectual property rights. We then analyze the various sets of circumstances in which antitrust plaintiffs argue for exceptions to those basic rules. Finally, we distinguish unilateral from concerted and conditional refusals to deal.