IP As Property / IP Rights Licensing / International Licensing

8. Requirements of United States Law

Two groups of U. S. laws impinge on international technology licensing, namely the antitrust laws and those that control the export of technology.

8.1 Application of U. S. Antitrust laws to International Technology Licensing

Since this paper is chiefly concerned with licensing Intellectual Property rights in an international context, the general question of the Application of U.S. Antitrust Law to such agreements is dealt with only briefly here. Foreign countries have over the years been very sensitive to what they have seen as attempts by the United States to export its antitrust laws to places that did not want them. This sensitivity led to the Foreign Antitrust Improvements Act of 1982 which provided that the two main U.S. Antitrust statutes, the Sherman Act and the Federal Trade Commission Act, would not apply to conduct involving trade or commerce with foreign nations unless the conduct has a direct, substantial and reasonably foreseeable effect on United States domestic trade, United States imports or on an exporter from the United States. It should, however, be noted that the Justice Department's Guidelines on International Operations and Licensing of Intellectual Property both state that they apply to the licensing of intellectual property abroad, although neither contains any specific example of problems in this field. In any case, at present the antitrust laws are of much less concern in the field of intellectual property licensing than was the case twenty years ago. The Department of Justice's Intellectual Property Guidelines today even have a subheading "Procompetitive benefits of Licensing". Nevertheless, attitudes can change during the life of long agreements and one should still be cautious about the application of U.S. law to those types of clauses that are on the EU's black list or the Japanese list of provisions that are likely to be unlawful if the agreement in which they are contained has any significant effect on U.S. domestic trade, imports or exporters.

Finally, it should be noted that the requirements of the Hart-Scott-Rodino Act[1], which requires that parties to a deal must give prior notice to the Federal Trade Commission and which primarily applies to mergers and acquisitions of companies, may apply to certain exclusive licensing deals. For such a situation to arise, the value of the "asset" being licensed must be at least $15,000,000 and the parties themselves must be of such a size that the Act applies to them. It is understood that the Department of Justice is considering expanding the situations in which intellectual property licenses may have to be notified to it.

8.2 Control of Export of Technology

The final provisions to consider are the restrictions imposed on those resident in the United States on sending technology abroad.[2] These restrictions are rather complex and are only touched on very briefly here. Export of technology is controlled by regulations made by the Department of State concerning, the supply of technology abroad in connection with arms[3] (these provision applying whatever the country to which transfer of technology is intended), regulations by the Department of Energy[4] concerning the transfer of unclassified information relating to atomic energy abroad (these also being of general application) and regulations made by the International Trade Administration Office of the Department of Commerce which administers the Export Administration Act, and is the branch of government one encounters most frequently in this field.[5] In each case, a license is required from the relevant authority unless the export of technology is required solely for the purposes of filing a patent application in which case a license can be obtained from the Patent and Trademark Office. So far as the Department of Commerce requirements are concerned, however, the regulations themselves provide a general license for the export of many types of technology to many countries so that a formal application for a license is often not necessary if the technology[6] is not defense-related and the country to which it is being sent is not subject to any special limitations.

1. 15 USC 18a.

2. In addition to the regulations discussed, 35 USC 184 also provides that a U.S. patent may be invalid if a foreign patent application is filed in respect of the same subject matter as the U.S. patent unless such filing is licensed by the patent office or a U.S. patent application has been on file for six months.

3. 22 USC 2751 et seq.

4. 10 C.F.R. part 810

5. 15 C.F.R. 779

6. 15 C.F.R. 779.4