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 the technology itself. Generally, such exclusive licenses may raise antitrust concerns only if there is a horizontal relationship among licensors, or among licensees, or between the licensor and its licensee(s). Examples of arrangements involving exclusive licensing that may give rise to antitrust concerns include cross-licensing by competitors that collectively possess market power, grantbacks, and acquisitions of intellectual property rights.

A non-exclusive license of intellectual property that does not contain any restraints on the competitive conduct of the licensor or the licensee generally does not present antitrust concerns. That principle holds true even if the parties to the license are in a horizontal relationship, because the non-exclusive license normally does not diminish competition that would occur in its absence.

A second form of exclusivity, exclusive dealing, arises when a license prevents or restrains the licensee from licensing, selling, distributing, or using competing technologies. Exclusivity may be achieved by an explicit exclusive dealing term in the license or by other provisions such as compensation terms or other economic incentives. Such restraints may anticompetitively foreclose access to, or increase competitors’ costs of obtaining, important inputs, or facilitate coordination to raise price or reduce output. But they also may have procompetitive effects. For example, a licensing arrangement that prevents the licensee from dealing in other technologies may encourage the licensee to develop and market the licensed technology or specialized applications of that technology. The Agencies will take into account such procompetitive effects in evaluating the reasonableness of the arrangement.

The antitrust principles that apply to a licensor’s grant of various forms of exclusivity to and among its licensees are similar to those that apply to comparable vertical restraints outside the licensing context, such as exclusive territories and exclusive dealing. However, the fact that intellectual property may in some cases be misappropriated more easily than other forms of property may justify the use of some restrictions that might be anticompetitive in other contexts.

As noted earlier, the Agencies will focus on the actual practice and its effects, not on the formal terms of the arrangement. A license denominated as non-exclusive (either in the sense of