The article explores how technology licensing is affected by product differences and competition. It shows that both the innovator and society benefit more from royalty licensing than auctions when there are many potential licensees. The number of licensees needed for royalty licensing to be profitable varies with product differentiation and competition type. In some cases, neither the innovator nor antitrust authorities need to know the type of competition to decide on the licensing contract. The innovator prefers combining auction with royalty licensing or fixed-fee with royalty over using just royalty or auction alone.