Given an auction approach to the sale of licenses for a new process innovation, it is argued that a seller outside the using industry may prefer to maintain more firms than less in the using industry, particularly if this can be accomplished without loss of revenue. The basic reason is that more firms implies more competition for future modifications and improvements to the new technology. It is then shown that the seller will license at least n — 1 of the n current firms in the industry, provided the seller can choose a price composed of both a fixed fee and a royalty element. The application of the analysis is illustrated by a discussion of the Pilkington's float glass process.