Compulsory licensing of technology and the essential facilities doctrine

We consider compulsory licensing of intellectual property as a remedy for anti-competitive practices. We identify aspects of intellectual property that could warrant a different remedy from those developed for access to physical essential facilities. Based on the analysis, we present a characterisation of optimal compulsory licensing for a simple market. We find that royalty payments offer a greater range of choices to a regulator than fixed fees. Thus, even though the marginal cost of supplying access to intellectual property is zero, some unit charging is likely to be efficient. © 2003 Elsevier B.V. All rights reserved.