Inter-temporal Tie-ins: A Case for Tying Intellectual Property Through Licensing

Hybrid licences tie trade secret rights (which have no fixed expiration) to related patent rights (which expire). Although level royalty hybrid licences, which charge a single royalty for both rights, have been prohibited, it can be shown that infinite-term licensing (ITL) for patent rights may be better than a limited-term patent, when returns to the licensor are fixed. This article explains hybrid licensing as a means of privately implementing the efficient ITL outcome when returns to the licensor are constrained but not necessarily fixed, without requiring a change in the length of the patent term.