Cross Licensing refers to the cross-license agreement between patentees, entered into for purposes of avoiding litigation concerning conflicting patents. It helps preserve the financial incentives for inventors to commercialize their existing innovations and undertake new, potentially patentable research.
Cross-license agreements have been frequently litigated in antitrust law. The court will analyze the cases that involve cross-license agreements under the Rule of Reason, in which both the anti-competitive and the pro-competitive effect of the agreement will be considered. Generally, such agreements are pro-competitive.
[Last updated in May of 2020 by the Wex Definitions Team]