The Interface of EC Competition Law and Intellectual Property Rights: the Essential and the Creative

This article uses the issue of compulsory licensing of copyright to explore the relationship between intellectual property law (specifically copyright law) and competition law in the EU. It takes as its starting position the proposition that competition law is the ultimate restraint on the monopoly potential of intellectual property with intellectual property rights (IPR) located in competition law. However, it argues that it is too simplistic to cast the approach of the European Court of Justice (ECJ) in theIMScase purely as one of competition law being allowed to trump copyright. Instead, it sees the judgment as an example of doctrinal compromise for both legal subsystems with competition law placing limits on the invocation of copyright as the basis for a refusal to deal, while suggesting a remedy in the form of compulsory licensing which runs contrary to its conceptual roots in private law and notions of freedom of contract.

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.

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.

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

Chapter 7 Intellectual Property Rights and Competition Policy

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.

Intellectual Property Rights and Standard-Setting Organizations

IP Law Reform and the Treaty of Lisbon

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.

The investment activity is diverse and can be carried out with the use of intellectual property rights in accordance with the current international and Russian investment law. The article aims to identify the specifics of the application of intellectual property rights as investments and the implementation of intellectual investments, i.e. investments endowed into intellectual property rights. The objectives of the study are to consider the categories of an investment and object of investment activity, intellectual property, exclusive and other intellectual rights, as well as to analyze and determine the features of legal regulation of the activity in question at the international and national levels in the Russian Federation. Based on the results of the systematic analysis with the use of formal legal, comparative and other research methods, it is concluded that investments as a property in a broad sense may include both exclusive and other non-personal intellectual property rights to the results of intellectual activity and equated means of individualization of goods, works, services and enterprises. At the same time, they exclude intellectual property itself as a set of various types of intangible products, moral and other personal non-proprietary intellectual rights by virtue of their inalienable and non-transferable character. It is argued to be the same with respect to the object of investment activity, i.e. the property which the investment is endowed in and is capable to bring income to the investor in the future. Investments into such intellectual property rights can be called as intellectual investments.The legal regulation of investment activity with the use of intellectual property rights has a dual character (in the sense that it is carried out by different investment legislative acts with the similar subject of their regulation) and depends on the type of a particular object used. If intellectual property rights are invested in fixed capital, then they are to be recognized as capital investments and are governed by the Federal Law of February 25,1999 No. 39-FZ “On Investment Activity in the Russian Federation Carried out in the Form of Capital Investments”. If intellectual property rights are used as the object of investment activity, i.e. where investments are endowed in, such intellectual investments are subject to the regulation by the Law of the RSFSR of June 26, 1991 No. 1488-1 “On Investment Activity in the RSFSR”.

Interface between Intellectual Property and Competition Law: Essential Facilities Doctrine

The interaction between competition law and intellectual property law continues to raise new questions, and gives rise to several interesting topics to debate. The European Commission’s intention ought to be twofold. On the one hand to free resources for the proactive appraisal of new policy areas, and on the other hand to ensure the uniform application of EU Competition Law through procedural guidance and economic, effect-based substantive rules. European Commission Guidelines note and explain the reasons for which market participants and competition watchdogs have accepted standard-setting because of its beneficial effects. Intellectual property law and competition law rules share the same objectives of promoting innovation and enhancing consumer welfare. Furthermore, Intellectual Property Rights (IPR) promotes dynamic competition by encouraging undertakings to invest in developing either new and/or improved products and processes. This is the reason why IPR are considered to be in general pro-competitive. Due to standardization agreements, efficiency gains may be achieved; market integration can be facilitated, transactions costs can be reduced, the necessary time for innovative products offered to end users can be minimized, and the interoperability between network and products can be reduced. For these reasons the question of market power can only be assessed on a case by case basis. Even if the establishment of a standard can create or increase the market power of IPR holders possessing IPR essential to the standard, there is no presumption that holding or exercising IPR essential to a standard equates to the possession or exercise of market power. It is estimated that this concept explains the ‘careful’ approach of the Commission in the Motorola and Samsung cases. The success story of the Huawei v. ZTE judgment followed, establishing the reasonable demand of balancing the bargaining powers between owners of so-called “SEP owners” and makers of smart phones and other tele-communications devices relying upon these patents (“makers”). However, in the spring of 2017, the Commission indicated it might publish a formal policy document in order to clarify the rules on patent ownership and licensing. It is hoped that any guidance by the Commission will build at least on the Huawei/ZTE judgment.

Intellectual Property: The Promise and Risk of Human Rights

Innovation is a commercially risky and legally perilous process. It is risky because large sunk costs are often required to initiate and sustain research, product development and other steps involved in the offering of the product and winning of the market. At the cusp of commercial success however, firms have to contend with uncertainty as to whether the manner in which they exploit any intellectual property (IP) rights they have, or may be acquiring, will pass the scrutiny of competition laws. In the wake of a recent Microsoft decision in the European Union and developments elsewhere, companies have had to reassess their corporate strategies, not merely at a local or regional level, but because of the nature of IP exploitation today, on a global scale as well. This paper begins with a reflection on how courts and competition authorities regard various legal strategies implemented in the exploitation of IP rights. The discussion includes an evaluation of the legitimacy of regulatory responses to these strategies as well as the regulatory schism that impacts trans-border IP strategies. The paper then considers how firms can maximise the value of their IP within the present regulatory environment by influencing the normative framework of competition policy. The limits of this influence are explored and the paper concludes with a discussion on how global trends are likely to shape the strategic landscape arising out of the interface between IP and competition law in the years ahead.

This is a partial version of a much longer work in progress. Because of the space limits imposed by the conference, the author has chosen to submit only the introduction and Parts I and II of the paper. The extended abstract spells out the agenda for the rest of the paper. Part II offers an empirical analysis of the intellectual property policies of standard-setting organizations in the telecommunications and computer networking industries. The presentation will discuss the full paper, and the author will make it available upon request directly to him. Four mains points are made: First, Standard-setting organization (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 (intellectual property) rights in a vacuum; we must consider them as they are actually used in practice. That means considering how SSO rules affect IP incentives. 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, antitrust law is not well designed to take account ofthe modern role of SSOs. Antitrust rules may unduly restrict SSOs even when those organizations are serving procompetitive ends. Fourth, the enforcement of SSO IP rules presents a number ofimportant but unresolved problems of contract and intellectual property law. Some suggestions are offered for how to think about these problems in the final part of this paper (upon request directly from the author).