License agreements can be a form of ancillary restraints in concentrations, albeit rarely.
The acquisition of a company or a part of a company can include intellectual property rights or know-how rights, which provide the acquirer with the ability to exploit/absorb the full value of the transferred assets. However, the seller may wish to keep hold of the ownership of such rights and exploit them for additional commercial activities. In this case, the seller may enter into a licensing agreement with the acquirer. With this licensing agreement, the seller can grant licenses to the acquirer, ensuring thereby that the acquirer will in reality be able to fully use all the transferred assets.
Nevertheless, this right of the seller is not absolute. If the acquirer needs the intellectual property rights (in particular the licenses, trademarks, business names, design rights, copyrights or similar rights) in order to market the goods or services produced by the transferred company or by the transferred part of the company, then the licenses in favor of the seller are not considered necessary for the implementation of the acquisition. That being said, the protection of the acquirer is preferred over the seller’s right to remain the owner of the intellectual property rights or know-how rights.
Likewise, the seller may wish to continue using some or all of the intellectual property rights or know-how rights for other commercial activities, even though he has already transferred them to the acquirer together with the other assets of the company or the part of the company. In this case, the acquirer may enter into a licensing agreement with the seller. With this licensing agreement, the acquirer can grant licenses to the seller in order to ensure that the latter will be able to continue using the transferred rights.
The licensing of intellectual property rights or know-how can be considered a necessary or integral part of the acquisition transaction. License agreements can be limited to a certain period of time or a certain fields of use—to the extent that they correspond to the activities of the company or the part of the company transferred. Additionally, licenses may be simple or exclusive. In either case, license agreement should be necessary, objective and reasonable for the implementation of the transaction, like all types of ancillary restraints.