Across-licensingagreement is acontractbetween two or more parties where each party grants rights to theirintellectual propertyto the other parties.
Patent law
editInpatent law,across-licensing agreementis an agreement according to which two or more parties grant a license to each other for the exploitation of the subject-matterclaimedin one or more of the patents each owns.[1]Usually, this type of agreement happens between two parties in order to avoid litigation or to settle an infringement dispute.[2]Very often, the patents that each party owns covers different essential aspects of a given commercial product. Thus by cross licensing, each party maintains their freedom to bring the commercial product to market. The term "cross licensing" implies that neither party pays monetaryroyaltiesto the other party, although this may be the case.
For example,MicrosoftandJVCentered into a cross license agreement in January 2008.[3]Each party, therefore, is able to practice the inventions covered by the patents included in the agreement.[4]This benefits competition by allowing each more freedom to design products covered by the other's patents without provoking apatent infringementlawsuit.
Parties that enter into cross-licensing agreements must be careful not to violateantitrustlaws and regulations. This can easily become a complex issue, involving (as far as the European Union is concerned) Art. 101 and 102 of theTreaty on the Functioning of the European Union(TFEU), previously Art. 81 and 82 of theEC Treaty,(abuse of dominant position, etc.) as well as licensing directives, cartels, etc.
Some companies file patent applications primarily to be able to cross license the resulting patents, as opposed to trying to stop a competitor from bringing a product to market.[5]In the early 1990s, for example,Taiwaneseoriginal design manufacturers,such asHon Hai,rapidly increased their patent filings after their US competitors brought patent infringement lawsuits against them.[6]They used the patents to cross license.
One of the limitations of cross licensing is that it is ineffective againstpatent holding companies.The primary business of a patent holding company is to license patents in exchange for a monetary royalty. Thus, they have no need for rights to practice other companies' patents. These companies are often referred to pejoratively aspatent trolls.
The economics literature has shown that firms with high capital intensities are more likely to strike a cross-licensing deal.[7]
Non patent law
editOther non-patentintellectual propertysuch ascopyrightandtrademarkcan also be cross-licensed. For example, a literary work and an anthology that includes that literary work may be cross-licensed between two publishers. A cross-license for computer software may involve a combination of patent, copyright, and trademark licensing.
See also
editReferences
edit- ^Shapiro, Carl, “Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting”,Innovation Policy and the Economy,MIT Press2001, p119 et seq.
- ^Statement of Jeffery Fromm, Hewlett-Packard Company, "Patent Pools and Cross Licensing", 2002, p8
- ^Ed Oswald, “Microsoft, JVC agree to cross-license patents”,BetaNewsJanuary 16, 2008, 2:29 PM
- ^The agreement does not necessarily include all of the patents that each owns
- ^"Archived copy"(PDF).Archived fromthe original(PDF)on 2006-09-01.Retrieved2006-09-15.
{{cite web}}:CS1 maint: archived copy as title (link)| Patent Flooding - ^Mark Nowotarski, “Introducing Patents into a Major Service Industry”,les Nouvelles,March 2003
- ^Galasso, A. (2012), Broad Cross-License Negotiations, Journal of Economics & Management Strategy Volume 21, Issue 4, pages 873–911.http://onlinelibrary.wiley.com/doi/10.1111/j.1530-9134.2012.00348.x/abstract