Patent licensing in the shadow of the Directive on the Enforcement of Intellectual Property Rights

Abstract

... Directive 2004/48/EC on the enforcement of intellectual property rights (IPRED)2 clarifies that permanent injunctions should not to be granted automatically3 and that remedies should be proportionate to infringements.4 On 29 November 2017, the European Commission issued further Guidelines on the IPRED, which reconfirmed such principles (this article was written before the publication of the Guidelines).5 This article examines the effects that the granting of quasi-automatic permanent injunctions (which are ex post tools, as they are generally awarded after the firms concerned have started discussing patent licences) may have on ongoing patent licensing negotiations (ex ante tools, because the negotiations precede the granting of injunctions).6 Hence, the purpose of this article is to conduct an economic analysis of whether and how the expectations of patentees and licensors on potential patent litigation affect their bargaining positions when negotiating a patent licence.