The Approaches of the European Commission and the U.S Antitrust Agencies Towards Exclusivity Clauses in Licensing Agreements

Abstract

This Article examines and compares the differing treatment of territorial restraints in licensing agreements under United States (U.S.) antitrust law and European Union (E.U.) competition law. While in the U.S. vertical territorial restraints are assessed under the Rule of Reason, in the E.U. they often are considered illegal per se, unless exempt under the E.U. Technology Transfer Regulation or by an express decision of the Commission addressed to the parties to the licensing agreement. Yet, even if a licensing agreement is exempt under the E.U. Regulation, the Regulation imposes severe time limitations on exclusivity clauses. These different approaches in the U.S. and the E.U. may be explained by the fact that, unlike U.S. antitrust agencies, the Commission still perceives competition rules as an instrument to attain a wider objective: i.e. market integration. This Article concludes that, in view of the achievements of the market integration process in the E.U., it is time for the Commission to adopt a more liberal approach towards these types of clauses.