The Interface of Competition and Intellectual Property Law – Taking Stock and Identifying New Challenges

Innovation is central to competition policy. Indeed, in some industries, it is the primary means by which firms compete. The metaphors are dramatic: innovation is a ‘life and death matter for the firm’ and ‘a weapon in the arms race of competition’. Even more fundamentally, innovation, economists tell us, is pivotal to the capitalist economy as a whole. Baumol, in his book on innovation, declares that it is innovation that drives economic growth and that, without it, economies stagnate. Despite the well-established role of innovation in competition law and policy, however, the contribution such a perspective brings to the particular innovation issues raised in Gray’s case, the subject of discussion in other chapters, is limited. A contest between an employer and employee for intellectual property rights to an invention has clearer implications for labour, intellectual property and corporate law. The response of competition law to this issue, it seems to me, is far less clear. In broad terms, competition law and policy is concerned with the promotion of competition or, putting it in the more negative terms of competition legislation, prohibiting conduct that lessens competition.5 With this focus, competition law would seem to have little interest, in a general sense, in whether intellectual property rights are granted to an employer or an employee. It is true that there is a well-established interface between competition and intellectual property laws and, in a broad sense, some of this interaction may be relevant. This is because competition law, like intellectual property law, sees innovation as one of its key aims.

It is indicated that each state must ensure fair competition in its market in order to support economic growth. This provision is also relevant for the European Union, within which the primary importance is to ensure free competition for the further development of a single system of circulation of goods, works and services, promotion of innovation and creativity, job creation and increased competitiveness, as all this is necessary for the EU to compete in global economy. This article provides a general analysis of the correlation and interaction between the provisions of intellectual property law and the provisions of competition law in the European Union (EU). In particular, the author examines the peculiarities of legal regulation of economic competition and intellectual property protection at the EU level, the state of compliance with EU competition law in the process of exercising and protecting intellectual property rights, and the role of court decisions in determining the balance between intellectual property protection and competition law requirements. The author emphasises that despite different objectives, competition law and intellectual property law have a common basis and therefore actively interact, i.e. these two systems are synergistic. The author analyses possible options for the relationship between protection against unfair competition and intellectual property laws, including the means that would reduce the often existing «tension» between them. Due to the need for a common regulatory framework to ensure that laws are in line with dynamic trade practices, the EU’s unfair competition laws are mostly flexible and general in nature. The author identifies the measures currently being taken by the EU to optimise the rules in this area. The author concludes that intellectual property protection, as well as effective antitrust regulation, are the most important legal mechanisms created to ensure economic growth based on the development and expanded use of innovations. The author also examines the measures currently being taken by the EU to optimize the rules in this area. It is concluded that the general trend of further development and improvement of interaction between antitrust and intellectual property legislation in the EU should be, first of all, overcoming regulatory and institutional dispersion.

Introduction The purpose of this chapter is to present an economic analysis of intellectual property right (IPR) law and its relationship with competition policy. The relevant economic literature on this subject is enormous and complex. Here, we will strive for simplicity, trying to extract the main concepts and proposing simple principles that might help to guide the application and design of both intellectual property and antitrust laws. While our analysis does not account for every single aspect of intellectual property law or every single competitive situation, we do believe that the analysis does derive useful general principles. The overriding thesis of this chapter will be the separation of intellectual property and competition law. This separation will apply to the design of the law: IP law should limit itself to properly assigning and defending property rights while competition law should be concerned with the use of such property rights. More precisely, competition law should be concerned only with the use and abuse of property rights that are sources of monopoly power. This principle of separation also applies to the enforcement of the law. The main theme here is the equality of treatment of various sources of monopoly power, i.e. of the use of various property rights. We will argue that once property rights of various types have been properly assigned, there is no reason for competition policy to further distinguish between the sources of monopoly power.

Intellectual Property Rights and Standard-Setting Organizations

Author(s): Lemley, Mark A. | Abstract: The role of institutions in mediating the use of intellectual property rights has long been neglected in debates over the economics of intellectual property. In a path-breaking work, Rob Merges studied what he calls collective rights organizations, industry groups that collect intellectual property rights from owners and license them as a package. Merges finds that these organizations ease some of the tensions created by strong intellectual property rights by allowing industries to bargain from a property rule into a liability rule. Collective rights organizations thus play a valuable role in facilitating transactions in intellectual property rights.There is another sort of organization that mediates between intellectual property owners and users, however. Standard-setting organizations (SSOs) regularly encounter situations in which one or more companies claim to own proprietary rights that cover a proposed industry standard. The industry cannot adopt the standard without the permission of the intellectual property owner (or owners).How SSOs respond to those who assert intellectual property rights is critically important. Whether or not private companies retain intellectual property rights in group standards will determine whether a standard is open or closed. It will determine who can sell compliant products, and it may well influence whether the standard adopted in the market is one chosen by a group or one offered by a single company. SSO rules governing intellectual property rights will also affect how standards change as technology improves.Given the importance of SSO rules governing intellectual property rights, there has been surprisingly little treatment of SSO intellectual property rules in the legal literature. My aim in this article is to fill that void. To do so, I have studied the intellectual property policies of dozens of SSOs, primarily but not exclusively in the computer networking and telecommunications industries. This is no accident; interface standards are much more prevalent in those industries than in other fields. In Part I, I provide some background on SSOs themselves, and discuss the value of group standard setting in network markets. In Part II, I discuss my empirical research, which demonstrates a remarkable diversity among SSOs even within a given industry in how they treat intellectual property. In Part III, I analyze a host of unresolved contract and intellectual property law issues relating to the applicability and enforcement of such intellectual property policies. In Part IV, I consider the constraints the antitrust laws place on SSOs in general, and on their adoption of intellectual property policies in particular. Part V offers a theory of SSO intellectual property rules as a sort of messy private ordering, allowing companies to bargain in the shadow of patent law in those industries in which it is most important that they do so. Finally, in Part VI I offer ideas for how the law can improve the efficiency of this private ordering process.In the end, I hope to convince the reader of four things. First, SSO rules governing intellectual property fundamentally change the way in which we must approach the study of intellectual property. It is not enough to consider IP rights in a vacuum; we must consider them as they are actually used in practice. And that means considering how SSO rules affect IP incentives in different industries. Second, there is a remarkable diversity among SSOs in how they treat IP rights. This diversity is largely accidental, and does not reflect conscious competition between different policies. Third, the law is not well designed to take account of the modern role of SSOs. Antitrust rules may unduly restrict SSOs even when those organizations are serving procompetitive ends. And enforcement of SSO IP rules presents a number of important but unresolved problems of contract and intellectual property law, issues that will need to be resolved if SSO IP rules are to fulfill their promise of solving patent holdup problems.My fourth conclusion is an optimistic one. SSOs are a species of private ordering that may help solve one of the fundamental dilemmas of intellectual property law: the fact that intellectual property rights seem to promote innovation in some industries but harm innovation in others. SSOs may serve to ameliorate the problems of overlapping intellectual property rights in those industries in which IP is most problematic for innovation, particularly in the semiconductor, software, and telecommunications fields. The best thing the government can do is to enforce these private ordering agreements and avoid unduly restricting SSOs by overzealous antitrust scrutiny.

Interface between Intellectual Property and Competition Law: Essential Facilities Doctrine

It is generally viewed that Intellectual property protection and competition law are odds with each other. Is there really any tussle between intellectual property protection and competition law? Intellectual property law creates and protects monopoly power and the other seeks to exclude it. IP exclusion provisions are included in the Indian Competition Act, 2002 in Section 3(5). This is to provide enforcement to intellectual property rights. But protection of intellectual property rights are not per se violates any competition provisions. The objective of competition law is to prohibit anti-competitive practices and the objective of both the stream is wealth maximization in any economy. Intellectual property protection is necessary to foster innovation and choices of products in the market. It infuses efficiency in the market and increases consumer welfare. India is in the nascent state of its administration of competition laws. There are sizable number of cases came before the Indian competition authorities (CCI) and Indian courts. Cases against Microsoft India and abuse of dominant case against Ericsson filed by an Indian company named Micromax is only the beginning of the interface cases on intellectual property and competition law. There is no sufficient case laws and jurisprudence is available in India in guiding the Indian authorities and courts on the interface between intellectual property and competition. It is necessary to make an analysis of the jurisprudence in the US and EU. First part of this paper deals with the US Antitrust Act, 1890 and analysis of a number of cases dealt by the US courts. The EU Regulations and cases are clearer on issues of intellectual property and competition law. Indian jurisprudence is not clear so far and few cases are dealt by the CCI and Indian courts. The study concludes that Indian authorities should learn from other jurisdictions and the jurisprudence will act as guideline for Indian authorities.

IP Law Reform and the Treaty of Lisbon

Chapter 7 Intellectual Property Rights and Competition Policy

Chinese Intellectual Property and Technology Transfer Law by Professor Zheng Chengsi with Michael D. Pendleton. Published by Sweet & Maxwell, London (1987, xli and 331 pp. incl. Preface, Tables of Contents, Statutes, Regulations, Rules, Circulars, Treaties and Index ). Hardback. Price £50 (UK). Intellectual property law academics and practitioners alike have found great difficulties in tackling the application of their subject within the People's Republic of China. While the practice in virtually every major economy in the world has been that intellectual property laws and competition laws have been introduced in order to modify, control and promote various aspects of existing commercial practice, in China it is rather the other way round – the decision to implement intellectual property laws in statutory form was taken in advance of …

This transnational study focuses on the US, Europe, and India to provide a critical evaluation of the global nexus between intellectual property and competition policy. The study's purpose is to look at how these two areas of law interact in order to get a better understanding of how they affect innovation, market competitiveness, and consumer welfare. Intellectual property rights are highlighted for their role in fostering innovation and creativity by providing holders with exclusive rights and monetary incentives. It does, however, recognize that exercising intellectual property rights may result in anti-competitive behaviour, limiting market access and hampering competition. Competition law, on the other hand, is handled as a means of preventing anti-competitive behaviour and guaranteeing fair competition. The goal of competition law is to provide a level playing field for new businesses. However, since IP law and competition law sometimes intersect, the issue of how far IP rights may be exploited without unnecessarily restricting competition arises.

The interaction between artificial intelligence and intellectual property rights (IPRs) is one of the key areas of development in intellectual property law. After much, albeit selective, debate, it seems to be gaining increasing practical relevance through intense AI-related market activity, an initial set of case law on the matter, and policy initiatives by international organizations and lawmakers. Against this background, Zurich University’s Center for Intellectual Property and Competition Law is conducting, together with the Swiss Intellectual Property Institute, a research and policy project that explores the future of intellectual property law in an AI context. This paper briefly describes the AI/IP Research Project and presents an initial set of policy recommendations for the development of IP law with a view to AI. The recommendations address topics such as AI inventorship in patent law; AI authorship in copyright law; the need for sui generis rights to protect innovative AI output; rules for the allocation of AI-related IPRs; IP protection carve-outs in order to facilitate AI system development, training, and testing; the use of AI tools by IP offices; and suitable software protection and data usage regimes.

This paper provides an overview of the efforts of the European Commission to identify and, when necessary, challenge anticompetitive behaviour with respect to standardization and the licensing of standardized technologies, as well as the case-law of the CJEU on the same subject. The paper starts by discussing the 1992 Communication on Intellectual Property Rights and Standardization, which was the first important contribution of the Commission on the complex interface between standardization, intellectual property and competition law. It then analyses the first major investigations that the Commission made into the licensing conduct of SEP holders, i.e. the proceedings against Rambus and Qualcomm. Next, it discusses the 2010 Commission Guidelines on horizontal cooperation agreements, which contain a chapter dedicated to the application of EU competition rules to standardization agreements. The paper then examines how the Commission has dealt with mergers involving firms holding large SEP portfolios, such as its Google/MMI and Microsoft/Nokia decisions respectively adopted in 2012 and 2013. The paper also analyses the Commission decisions of 2014 against Motorola and Samsung regarding the use of injunctions by SEP holders to enforce their patents against standard implementers. It also analyses the Huawei v. ZTE judgment adopted by the CJEU in 2015, in which the CJEU was asked to determine the circumstances in which SEP holders could seek injunctions against standard implementers without breaching Article 102 TFEU. The paper then discusses several forms of licensing or litigation conduct, which can be problematic under EU competition law, but which have not yet been dealt with by the EU courts or the Commission. Finally, the paper concludes.

European Union Competition Law, Intellectual Property Law and Standardization

The role of institutions in mediating the use of intellectual propertyrights has long been neglected in debates over the economics ofintellectual property. In a path-breaking work, Rob Merges studied what hecalls "collective rights organizations," industry groups that collectintellectual property rights from owners and license them as a package.Merges finds that these organizations ease some of the tensions created bystrong intellectual property rights by allowing industries to bargain froma property rule into a liability rule. Collective rights organizations thusplay a valuable role in facilitating transactions in intellectual propertyrights.There is another sort of organization that mediates between intellectualproperty owners and users, however. Standard-setting organizations (SSOs)regularly encounter situations in which one or more companies claim to ownproprietary rights that cover a proposed industry standard. The industrycannot adopt the standard without the permission of the intellectualproperty owner (or owners).How SSOs respond to those who assert intellectual property rights iscritically important. Whether or not private companies retain intellectualproperty rights in group standards will determine whether a standard is"open" or "closed." It will determine who can sell compliant products, andit may well influence whether the standard adopted in the market is onechosen by a group or one offered by a single company. SSO rules governingintellectual property rights will also affect how standards change astechnology improves.Given the importance of SSO rules governing intellectual property rights,there has been surprisingly little treatment of SSO intellectual propertyrules in the legal literature. My aim in this article is to fill that void.To do so, I have studied the intellectual property policies of dozens ofSSOs, primarily but not exclusively in the computer networking andtelecommunications industries. This is no accident; interface standards aremuch more prevalent in those industries than in other fields. In Part I, Iprovide some background on SSOs themselves, and discuss the value of groupstandard setting in network markets. In Part II, I discuss my empiricalresearch, which demonstrates a remarkable diversity among SSOs even withina given industry in how they treat intellectual property. In Part III, Ianalyze a host of unresolved contract and intellectual property law issuesrelating to the applicability and enforcement of such intellectual propertypolicies. In Part IV, I consider the constraints the antitrust laws placeon SSOs in general, and on their adoption of intellectual property policiesin particular. Part V offers a theory of SSO intellectual property rules asa sort of messy private ordering, allowing companies to bargain in theshadow of patent law in those industries in which it is most important thatthey do so. Finally, in Part VI I offer ideas for how the law can improvethe efficiency of this private ordering process.In the end, I hope to convince the reader of four things. First, SSO rulesgoverning intellectual property fundamentally change the way in which wemust approach the study of intellectual property. It is not enough toconsider IP rights in a vacuum; we must consider them as they are actuallyused in practice. And that means considering how SSO rules affect IPincentives in different industries. Second, there is a remarkable diversityamong SSOs in how they treat IP rights. This diversity is largelyaccidental, and does not reflect conscious competition between differentpolicies. Third, the law is not well designed to take account of the modernrole of SSOs. Antitrust rules may unduly restrict SSOs even when thoseorganizations are serving procompetitive ends. And enforcement of SSO IPrules presents a number of important but unresolved problems of contractand intellectual property law, issues that will need to be resolved if SSOIP rules are to fulfill their promise of solving patent holdup problems.My fourth conclusion is an optimistic one. SSOs are a species of privateordering that may help solve one of the fundamental dilemmas ofintellectual property law: the fact that intellectual property rights seemto promote innovation in some industries but harm innovation in others.SSOs may serve to ameliorate the problems of overlapping intellectualproperty rights in those industries in which IP is most problematic forinnovation, particularly in the semiconductor, software, andtelecommunications fields. The best thing the government can do is toenforce these private ordering agreements and avoid unduly restricting SSOsby overzealous antitrust scrutiny.