Law & Economics: INTELLECTUAL PROPERTY - OBLIGATION TO GRANT A LICENCE

What is the reasonnable price for a compulsory licence?

Contrary to the calculation of cost for access to infrastructures, there is no generally accepted robust method to determine the price of a patent (or copyright) licence made compulsory because it is an essential facility or in case of abuse of dominant position. Through an economic analysis it is however possible to identify certain conditions that should be complied with so that the royalty paid does not reduce a company’s incentive to innovate. The decision of the European Commission against Microsoft illustrates this.

*This article is an automatic translation of the original article in French, provided here for your convenience. Read the original article. How to determine the amount of an intellectual property royalty when competition authorities decide to impose a compulsory licence? What remuneration could Microsoft receive, for example, by providing its competitors with the information to ensure the interoperability of their products with Windows? In general, how to set the price access to an essential facility when it is in the form of information? Starting with the Commission's Microsoft decision of 24 March 2004, the article shows how economic analysis can shed light on this question. Few compulsory licensing decisions have been made to correct an abuse of dominance or to provide access to

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  • Ecole Nationale Superieure des Mines de Paris

Quotation

François Lévêque, What is the reasonnable price for a compulsory licence? , December 2004, Concurrences N° 1-2004, Art. N° 12108, pp. 16-20

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