CLP Licensing Law & Regulations 3 — Questions and Answers
Question 1: Under U.S. antitrust law, which agency has primary jurisdiction over licensing practices that may constitute anticompetitive conduct?
- The U.S. Patent and Trademark Office (USPTO)
- The Department of Justice (DOJ) Antitrust Division and the Federal Trade Commission (FTC) (Correct answer)
- The International Trade Commission (ITC)
- The U.S. Copyright Office
Correct answer: The Department of Justice (DOJ) Antitrust Division and the Federal Trade Commission (FTC)
The DOJ Antitrust Division and the FTC jointly enforce antitrust laws in the U.S., including scrutinizing anticompetitive licensing practices.
Question 2: What is 'patent misuse' and how does it affect a licensor's ability to enforce a patent?
- Intentional infringement by a patent licensee that voids the license
- A defense that arises when a patent holder improperly extends the patent's scope through anticompetitive licensing practices, rendering the patent temporarily unenforceable (Correct answer)
- Filing a patent application with fraudulent claims that later invalidates the patent
- Using a patent in a field of use not covered by the original claims
Correct answer: A defense that arises when a patent holder improperly extends the patent's scope through anticompetitive licensing practices, rendering the patent temporarily unenforceable
Patent misuse is an equitable defense that bars enforcement of a patent when the holder has expanded the patent's scope beyond its lawful reach, such as through tying arrangements.
Question 3: A software company licenses its product under a 'shrink-wrap' license. Which legal issue has historically been most disputed regarding such licenses?
- Whether the software qualifies for copyright protection
- Whether terms visible only after purchase constitute a binding contract (Correct answer)
- Whether software licenses are subject to UCC Article 2 sales provisions
- Whether shrink-wrap licenses are subject to export controls
Correct answer: Whether terms visible only after purchase constitute a binding contract
Courts have long debated whether shrink-wrap terms, revealed only after purchase and opening, form an enforceable contract, with outcomes varying by jurisdiction.
Question 4: What does FRAND stand for in the context of standard-essential patent (SEP) licensing?
- Fair, Reasonable, And Non-Discriminatory (Correct answer)
- Federal Royalty And Non-Disclosure
- Full Rights And No Derivatives
- Fixed Rate And Negotiated Duration
Correct answer: Fair, Reasonable, And Non-Discriminatory
FRAND (Fair, Reasonable, And Non-Discriminatory) terms are commitments SEP holders make to standards bodies to license their essential patents on such terms.
Question 5: Which of the following best describes a 'compulsory license' under U.S. copyright law?
- A license imposed by a court on a copyright infringer as a remedy
- A statutory license that allows certain uses of copyrighted works without the owner's permission in exchange for specified royalties (Correct answer)
- A government seizure of copyright for national security purposes
- A mandatory license granted when a copyright holder refuses to license at all
Correct answer: A statutory license that allows certain uses of copyrighted works without the owner's permission in exchange for specified royalties
Compulsory licenses (e.g., for musical compositions under 17 U.S.C. § 115) allow specific uses without owner consent upon payment of statutory royalty rates.
Question 6: In the context of technology licensing, what is a 'most-favored licensee' (MFL) clause?
- A clause requiring the licensor to give the licensee the same or better terms offered to any future licensee (Correct answer)
- A clause granting the licensee priority rights to acquire the licensed technology outright
- A provision requiring the licensee to report all sublicenses to the licensor
- A clause giving the licensor the right to terminate if a preferred competitor is licensed
Correct answer: A clause requiring the licensor to give the licensee the same or better terms offered to any future licensee
An MFL clause entitles the licensee to receive terms no less favorable than those granted to any other similarly situated licensee.
Question 7: Under U.S. law, what is the effect of recording a patent license with the USPTO?
- Recording is mandatory; unrecorded licenses are void against the patent owner
- Recording provides constructive notice to subsequent purchasers and assignees, protecting the licensee's rights (Correct answer)
- Recording converts a non-exclusive license into an exclusive license by operation of law
- Recording establishes the royalty rate as the official market rate for that patent
Correct answer: Recording provides constructive notice to subsequent purchasers and assignees, protecting the licensee's rights
Under 35 U.S.C. § 261, recording a patent license at the USPTO gives constructive notice and protects the licensee against subsequent bona fide purchasers without actual notice.
CLP Licensing Law & Regulations 3
Under U.S. antitrust law, which agency has primary jurisdiction over licensing practices that may constitute anticompetitive conduct?