FIELD-OF-USE RESTRICTIONS IN LICENSING AGREEMENTS
Session Contracts I
Session ChairTBA

Presenter(s) Florian Schuett, Toulouse School of Economics (TSE) and European University Institute (EUI)
Co-Author(s) None
Keywords licensing, overlap and usage restrictions
JEL Codes D23, L24, O30

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A widely used clause in license contracts - the field-of-use restriction (FOUR) - precludes licensees from operating outside of the specified technical field. When a technology has several distinct applications, FOUR allow the licensor to slice up his rights and attribute them to the lowest-cost producer in each field of use. This can improve production efficiency. With complex technologies, however, the boundaries of fields of use may be difficult to codify, entailing a risk of overlap of licensees' rights. We explore how this affects the optimal license contract when the licensor's effort determines the probability of overlap.

 
When & Where
Thu 3 Sep 2009
16:00 - 18:00
Room
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