Kai Ottung v Klee & Weilbach A/S and Thomas Schmidt A/S. (Competition ) [1989] EUECJ R-320/87 (12 May 1989)

Kai Ottung v Klee & Weilbach A/S and Thomas Schmidt A/S. (Competition ) [1989] EUECJ R-320/87 (12 May 1989)

A contractual obligation to pay royalty for an indeterminate period, including after patent expiry, does not in itself constitute a restriction of competition under Article 85(1) EEC Treaty where the licensee can freely terminate the agreement. A clause prohibiting manufacture and marketing after termination comes within Article 85(1) only if it appreciably affects trade between Member States in its economic and legal context.

Citation
[1989] EUECJ R-320/87
Parties
Plaintiff: Kai Ottung; Licensee/defendant: A/S Anton Petersen & Henius Eftf
Jurisdiction
European Union
Judgment Date
12 May 1989
Procedural Posture
Preliminary Ruling / Reference for Preliminary Ruling Under Article 177 EEC Treaty
Outcome
Preliminary ruling issued; questions answered as specified.
Legal Topics
Licensing Agreements, Patent Expiry, Royalty Payments, Restriction of Competition, Article 85(1) EEC Treaty
Competition Law Intellectual Property Law Contract Law Licensing Agreements Patent Expiry Royalty Payments Restriction of Competition Article 85(1) EEC Treaty

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 2 Party arguments 2
Sign in to unlock

Parties

Kai Ottung

Plaintiff

A/S Anton Petersen & Henius Eftf

Licensee/defendant

Procedural Posture

Preliminary Ruling / Reference for Preliminary Ruling Under Article 177 EEC Treaty

Legal Issues

  1. 1 Does a contractual obligation to pay royalty for an indeterminate period, including after patent expiry, restrict competition under Article 85(1) EEC Treaty?
  2. 2 Does a clause prohibiting manufacture and marketing after agreement termination restrict competition under Article 85(1)?

Ratio Decidendi

A contractual obligation to pay royalty for an indeterminate period, including after patent expiry, does not in itself constitute a restriction of competition under Article 85(1) EEC Treaty where the licensee can freely terminate the agreement. A clause prohibiting manufacture and marketing after termination comes within Article 85(1) only if it appreciably affects trade between Member States in its economic and legal context.

Court Disposition

Preliminary ruling issued; questions answered as specified.

Orders

  • A contractual obligation to pay royalty for an indeterminate period, including after patent expiry, does not in itself restrict competition under Article 85(1) EEC Treaty where the agreement was entered into after patent application and before grant.
  • A clause prohibiting manufacture and marketing after termination comes within Article 85(1) only if it appreciably affects trade between Member States.