Ripples In the Patent Pool: The Impact and Implications of the Evolving Essentiality Analysis

Michael Lavine, New York University School of Law

11/04/2008
(Original Publish Date: 7/8/2008)

Over the past several decades, the U.S. approach to patent pool licensing has evolved from a very strict and cautious analysis to a more supportive proclamation of the pro-competitive potential of patent pool licensing arrangements. This current enthusiasm is also reflected by the European Commission's Guidelines on Technology Transfer Agreements, which are patterned after U.S. policy and regulations on intellectual property and competition. In addressing competition issues related to patent pools, U.S. courts and antitrust agencies such as the Department of Justice (DOJ) and the Federal Trade Commission (FTC) focus heavily on the essentiality of the patents involved in the licensing arrangement. In fact, case law and administrative opinions suggest that the essentiality analysis is often the "thumb on the scale" when the competitive harm and benefits of a patent pool licensing arrangement are being assessed. In general, the inclusion of "non-essential" patents in patent pool arrangements tends to raise anti-competition concerns, while the dominant presence of "essential" patents is viewed as pro-competitive.