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RECOMMENDATIONCOMPETITION
Recommendation of the Council concerning the Application of Competition Laws and Policy to Patent and Know-How Licensing Agreements
31 March 1989 - C(89)32/FINAL

THE COUNCIL,

Having regard to Article 5 b) of the Convention on the Organisation for Economic Co-operation and Development of 14 December 1960;

Having regard to the Recommendation of the Council Concerning Action Against Restrictive Business Practices relating to the Use of Patents and Licenses [C(73)238(Final)];

Having regard to the Report by the Committee on Competition Law and Policy on Competition Policy and Intellectual Property Rights [CLP(89)3 and Corrigendum 1];

Recognising the incentives for innovative activity created by patent rights;

Recognising that the licensing of patents and know-how both disseminates new technology and provides returns to innovators;

Recognising that the creation of property rights in innovation does not in itself, conflict with competition laws or policy;

Considering, however, that the licensing of intellectual property rights, like other agreements between enterprises, contains a risk of anti-competitive effects;

Considering that the risk of anti-competitive effects in patent and know-how licensing agreements depends upon the relationship between the parties, i.e. whether they are actual or potential competitors, the structure of the relevant markets and the terms of the particular agreement;

Considering that the risk of anti-competitive effects cannot, apart from purely cartelizing agreements, be assessed except on a case-by-case basis;

Considering that the Conclusions of the Committee on Competition Law and Policy contained in its above mentioned Report present a useful structure for the analysis of patent and know-how licensing agreements;

I.   RECOMMENDS therefore to the Governments of Member countries that insofar as their laws permit, the analysis contained in the Conclusions of the Report of the Committee on Competition Law and Policy on Competition Policy and Intellectual Property Rights [CLP(89)3 and Corrigendum 1] be taken into account when reviewing patent and know-how licensing agreements from the perspective of competition law and policy.

II.   DECIDES that this Recommendation will cancel and replace the Council Recommendation of 22 January 1974 concerning Action Against Restrictive Business Practices Relating to the Use of Patents and Licences [C(73)238(Final)].

Relevant body:
Committee on Competition Law and Policy now called Competition Committee
 
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