This article was first published in Competition Law Insight, September 2016
Is it anticompetitive to make a licensee pay royalties for invalid or non-infringed patents?
In July 2016, the Court of Justice of the European Union (CJEU) handed down a relatively rare judgment focusing on the treatment of patent licences under article 101 TFEU. Responding to a preliminary reference from the Paris Court of Appeal, the CJEU considered whether article 101 prevents a licensor from enforcing an obligation to pay royalties for the entire duration of a licence agreement, in circumstances where the licensed patents are found to be either invalid or non-infringed. Here, we outline the background to the dispute that gave rise to the preliminary reference; examine the key points made in Advocate General Wathelet’s opinion of March 2016 and in the CJEU’s subsequent judgment; and conclude by considering the implications of the judgment for licensors and licensees.

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