The quote in the title refers to a recurring principle in the Antitrust Guidelines for the Licensing of Intellectual Property, issued jointly by the US Department of Justice and the Federal Trade Commission in 1995. That report states that "The Agencies" general approach in analyzing a licensing restraint under the rule of reason is to inquire whether the restraint is likely to have anticompetitive effects and, if so, whether the restraint is reasonably necessary to achieve procompetitive benefits that outweigh those anticompetitive effects. We apply this standard of evaluation to recent proposals for joint licensing negotiations in standard setting contexts, which have been offered as a solution to the problem of opportunistic licensing and patent hold up. We find that, to the contrary, joint negotiations are not "reasonably necessary" to prevent hold up. Instead, other more moderate policy solutions that take advantage of existing institutional features within standard setting bodies have a greater likelihood of preventing hold up without running the risk of anticompetitive licensee collusion that is present with joint negotiations. In particular, we posit that standard setting bodies should set voting rules to obtain majority support in the selection of technologies for a standard and should consider means of encouraging ex ante bilateral negotiations. In addition, competition authorities could focus on the enforcement of non-discriminatory licensing as a means of preventing anticompetitive opportunistic hold up.


A. Jorge Padilla

LECG Europe

The Mannheim Competition Policy Forum is designed to give researchers and representatives from practice an opportunity to discuss competition policy issues and points of view.

The Forum will address, for example, problems that occur in detecting and punishing cartels. Furthermore, it will examine the various possible effects of mergers, for example on companies’ product prices or their product range and innovative behaviour. It will explain the advantages and disadvantages of various simulation models which allow an assessment of competition effects prior to a merger. It also intends to discuss possibilities of preventing the abuse of dominant market positions. By providing an exchange of ideas on these and other topics, the Mannheim Competition Policy Forum will make a valuable contribution to improving transfer of scientific findings to competition policy practice.

The Mannheim Competition Policy Forum is due to take place every other Thursday during the university semester. It begins at 17:15 and is open to all interested parties. The lectures are held in English.


11.09.2008 | 17:15 - 18:30 Uhr

Event Location

ZEW, L 7,1 D-68161 Mannheim


Research Associate