Introduction Control of Anti-Competitive Practices in Contractual Licenses

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There is no guarantee that a licensor holding any of those rights would exercise them in an equitable manner which is fair to a licensee. It is therefore necessary to establish a system that would, as far as practicable, prevent abusive exercise of those rights. Such abusive practices would restrict competition and that is the purpose of controlling them. The abuse may take several forms. While the larger purpose of controlling abusive licensing practices is to preserve competition, the immediate purpose is to ensure that the holders of the rights do not demand from the licensees any obligation which may be either unrelated to their obligations or which they do not agree to. The simple position is that parties in such situations are unequal as far as bargaining power is concerned. Some forms of abusive exercise of intellectual property rights imposed in licensing agreements are: conditions for exclusive dealing, price fixing, resale maintenance, etc.

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