Competition aspects.

Abstract

AbstractThis chapter examines the competition law implications of patent licensing, patent pools and patent thickets. Competition law is used in developed countries as a means of limiting the harmful effects of Intellectual Property Rights. Their competition laws are used to prevent price fixing by rights holders and predatory activities arising from a dominant market position. The important question in a food security context is the extent to which IP protection provides an incentive for agricultural innovation. It has been suggested that broad patents in the biotechnology field may have greater potential to impede innovation than in other industries. Licensing of proprietary goods or technologies could have anti-competitive effects where competitors agree to divide markets, fix prices or limit output or where the licence has an exclusionary effect, e.g. where it excludes other potential licensors of substitutable IP; or facilitates the licensee's accumulation of market power in competing technologies. An alternative to cross-licensing as a means of negotiating patent thickets is the creation of patent pools. This is an arrangement among multiple patent holders to aggregate their patents, which are shared by members of the pool and made available on standard terms to non-members of the pool. A study commissioned by the USPTO has suggested that patent pools are a solution to the problem of biotechnological patent thickets. The creation of patent pools was originally seen as an impermissible use of IPR beyond what was required to incentivize innovation. The increase in patenting in the biotechnological and other high technology industries has led to the development of 'patent thickets', which are defined as an overlapping set of patent rights requiring that those seeking to commercialize new technology obtain licences from multiple patentees. The IP Guidelines indicate that anticompetitive effects may also occur if the pooling arrangement deters or discourages participants from engaging in research and development which is more likely 'when the arrangement includes a large fraction of the potential research and development in an innovation market'. The Australian Competition and Consumer's Commission (ACCC) follows the US approach in finding that patent pools and cross-licensing arrangements could have either positive or negative implications for competition. The ACCC noted the potential for price fixing, market sharing, or agreements among competitors without any possible pro-competitive justification. It suggested that patent pools would be less likely to raise competition concerns if: they combine complementary patents; licensing arrangements do not restrict access to the pool's technology by competitors, potential entrants, or third parties; and pooling arrangements do not facilitate sharing or access to competitors' commercially sensitive information in the relevant or downstream markets.