This paper reviews the antitrust treatment of patent pooling and cross-licensing
arrangements from E. Bement v. National Harrow, decided in 1902, to the Department
of Justice business review letters on the MPEG and DVD patent pools. I examine the
factors that the courts identified as pertinent to the antitrust outcome and compare
them to the competitive factors identified in the DOJ/FTC Antitrust Guidelines for
the Licensing of Intellectual Property. Until recently, the competitive relationship
of the patents was not a major determinant of the antitrust outcome in most cases.
Instead, the courts have focused on restrictive licensing terms that affect downstream
prices. I consider the logic of this approach to evaluating antitrust liability.
I also propose an approach to evaluating the antitrust risks of arrangements that
combine potentially blocking patents.