Law Commons^™

An Economic Analysis Of Royalty Terms In Patent Licenses, Michael J. Meurer

Faculty Scholarship

Efficient exploitation of a patent often requires patentees to license users of their inventions. The courts, on the other hand, have proscribed many forms of license agreements and discouraged patent licensing in general, thereby diminishing the efficacy of the patent system as a stimulus to R & D. This negative attitude is attributable to fears that licensing will be used to protect invalid patents and secure illegitimate extensions of monopoly power. Part I of this Note reviews judicial treatment of certain royalty terms in patent licenses, describing the restraints the courts have imposed on the freedom of patentees to license …