Asked by Morgan Jones on May 06, 2024
Verified
Bunyan Corp.has patented a revolutionary chainsaw.To maximize the revenues from its patent and recover its research and development expenses,Bunyan requires other manufacturers that make the chainsaw under license from Bunyan to adhere to a minimum price schedule.Bunyan also requires its retail dealers to adhere to a minimum resale price schedule.The Justice Department has challenged Bunyan's marketing practices as unlawful.Is the challenge valid? Explain your reasoning.
Minimum Price Schedule
A regulatory tool or policy setting the lowest price at which goods or services can be legally sold, often used in agricultural markets or with alcohol sales.
- Analyze the application of antitrust laws to patent licensing and the arguments surrounding lawful and unlawful pricing practices.
Verified Answer
ZK
Zybrea KnightMay 07, 2024
Final Answer :
The Justice Department's challenge is partly valid and partly invalid.Bunyan's restrictions on the price charged by manufacturers making the chainsaw under license from Bunyan are lawful under the patent licensing doctrine.The patent licensing doctrine,however,does not shield Bunyan's resale price maintenance agreements with its retailers.
Learning Objectives
- Analyze the application of antitrust laws to patent licensing and the arguments surrounding lawful and unlawful pricing practices.