Excessive royalties meaning

In practice, excessive royalties describes royalty rates demanded by a dominant undertaking for licensing intellectual property or related rights that are unfair or disproportionate to the economic value of the licensed technology, work or service. It is not a term defined in statute, but a descriptive expression grounded in the case law on excessive pricing. The Court of Justice in United Brands v commission held that charging a price excessive because it bears no reasonable relation to the product’s economic value is an abuse; the same analysis can apply to royalties. Across England & Wales, Scotland and Northern Ireland, the Chapter II prohibition (Competition Act 1998) is applied, with EU excessive‑pricing jurisprudence influential. In Ireland, Article 102 TFEU and section 5 of the Competition Act 2002 (as amended) apply directly. Key features are: (1) dominance in the relevant licensing/technology market (including where a right is essential or standard‑essential), and (2) royalties that are unfair in themselves or when compared with benchmarks. Evidence may include price–cost margins, comparisons with other licences (including FRAND terms for SEPs), geographic or temporal comparators, and objective justifications (risk, investment, exclusivity). Typical contexts include patent and SEP licensing, collective rights management tariffs and patent pools. Potential outcomes include...