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Unilateral Refusals to License 

Hovenkamp, Herbert, 2 J. Competition L. & Econ. 1 (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 part 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. As such, efforts to invoke antitrust law in this context deserve special scrutiny.

Courts are properly extremely reluctant to find liability on the basis of a company’s unilateral refusal to deal, even if that company is a monopolist. That reluctance is even stronger when a refusal to license intellectual property rights is at stake, because the ability to exclude others from using the right is at the heart of IP policy. Nonetheless, courts continue to struggle with how to treat conditional refusals to license, which will sometimes be illegal, and how to draw the lines among unilateral, conditional, and concerted refusals to deal.

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