Scuba Diving.Marcy invented a new type of mask for scuba divers that was not subject to fogging.She agrees to allow Jenny to manufacture and sell the mask.She receives a sum of money for every mask that Jenny sells.Similarly,Marcy entered into an agreement with Frank to allow him to sell the masks,but only if he also purchased non-patented diving suits from Marcy.All parties proceeded to do very well with their sales.Which of the following describes the agreement between Marcy and Frank?
A)It is a legal tying arrangement.
B)It is a legal cross-licensing agreement.
C)It is an illegal tying arrangement.
D)It is an illegal cross-licensing agreement.
E)It is both a legal tying and a legal cross-licensing agreement.

Question

Quizplus · Accepted Answer

A patent holder may not use the patent for an illegal purpose.The two most common illegal purposes are tying arrangements and cross-licensing.A tying arrangement occurs when the holder issues a license to use the patented object only if the licensee agrees to buy some non-patented product from the holder.Cross-licensing occurs when two patent holders license each other to use their patents only on the condition that neither licenses anyone else to use his or her patent without the other's consent.Both of these activities are unlawful because they tend to reduce competition.