425. Terms in restraint of trade.

(4)     Restrictions on Contracts

425.     Terms in restraint of trade.

Conditions in a licence which are in restraint of trade must be reasonable both as between the parties and in the interest of the public1. A condition imposing penalties upon manufacture of more than a certain quantity of the patented article may be reasonable2. A condition that the licensee is not to make goods or execute works competing with those the subject of the licence may be reasonable, as may a condition that a licensee is only to sell the goods of the patentee