Honeywell's proposed acquisition of mobile manufacturing hardware leader Intermec had raised the interest of the U.S. Federal Trade Commission's antitrust enforcement teams. However, federal officials have now come up with a creative patent licensing solution they believe should uphold fair market competition.
According to Reuters, Honeywell has agreed to license several key patents regarding barcode scanning technology to direct rival Datalogic for the next 12 years.
"Although divestiture of assets is the preferred remedy in merger cases, licensing requirements can preserve competition in markets where access to needed technology is the main barrier to entry," explained FTC Bureau of Competition director Deborah Feinstein. "By requiring Honeywell to license its technology, the proposed order gives Datalogic access to the patents it needs to enter the U.S. market immediately and restore the competition lost due to the merger."
Alongside Motorola, Honeywell and Intermec had been considered the only U.S. purveyors of two-dimensional scanning engines with patent portfolios broad enough to successfully deflect infringement lawsuits from smaller competitors. Although the FTC strategy cannot directly inspire the development of American firms, the decision is expected to diminish one of the strongest barriers to market entry for foreign innovators.