Inter-Temporal Tie-Ins: A Case for Tying Intellectual Property
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Abstract
Hybrid licences tie trade secret rights (which have no fixed expiration) to related patent rights (which expire). Although level royalty hybrid licences, which charge a single royalty for both rights, have been prohibited, it can be shown that infinite-term licensing (ITL) for patent rights may be better than a limited-term patent, when returns to the licensor are fixed. This paper explains hybrid licensing as a means of privately implementing the efficient ITL outcome when returns to the licensor are constrained but not necessarily fixed, without requiring a change in the length of the patent term.