Justice Agencies Seek Update on IP Licensing Guidelines

The Antitrust Division and the Federal Trade Commission are seeking public comment on a proposed update to the Antitrust Guidelines for the Licensing of Intellectual Property, also known as the IP Licensing Guidelines. The guidelines, which were issued in 1995, are being revised to reflect changes in the law since their inception.

According to Acting Assistant Attorney General Renata Hesse, the guidelines have been invaluable to the department’s investigative and enforcement efforts since their issuance. ‘They have also guided business planning, and they have been cited by courts, in numerous government briefs, business review letters and policy documents.’

Chairwoman Edith Ramirez of the Federal Trade Commission stated, ‘Licensing is a cornerstone of a strong system of IP rights because it offers one way that firms can maximize the value of their IP and realize an appropriate return on their investment.’

The agencies have determined that some revisions are in order because the IP Licensing Guidelines should accurately reflect intervening changes in statutory and case law. For example, Congress recently enacted the Defend Trade Secrets Act of 2016, creating for the first time a federal cause of action for misappropriation of trade secrets.

The proposed updated IP Licensing Guidelines reflects the agencies’ knowledge and experience in this area, which has accumulated over the past 20-plus years. The agencies have applied the same antitrust analysis to conduct involving intellectual property as to conduct involving other forms of property, taking into account the specific characteristics of a particular property right.

The agencies do not presume that intellectual property creates market power and recognize that intellectual property licensing allows firms to combine complementary factors of production and is generally procompetitive. The proposed update is intended to modernize the IP Licensing Guidelines without changing the agencies’ enforcement approach with respect to intellectual property licensing.

The public comment period is open for 60 days, and the agencies will consider all comments received before finalizing the updated guidelines.