IP Related Competition Issues

Prof. Dr. Peter ChroczielFreshfields Bruckhaus DeringerFrankfurt am Main

DF379116

Patent Enforcement by Market Leaders:

Patent = Dominant Position ?

Enforcement = Abuse ?

General Question:

• Does competition law interfere with the exploitation of IP rights?

• Yes -— Compulsory licensing— Restrictions on the terms of a license

Article 82 and Compulsory Licensing

• Can refusal to license be an abuse of a dominant position ?• Yes:

— Magill: a dominant copyright owner abused its position simply by refusing to license its rights to others

• But:— Narrow terms of judgment— Tiercé Ladbroke and Oscar Bronner

• The future and IMS

The background - Magill

• The facts• Copyright confers the exclusive right of reproduction• Refusal to license is not in itself an abuse of dominance• Refusal would be an abuse in „exceptional

circumstances“:— Preventing the appearance of a new product— No justification for the refusal— Reserving a secondary market (TV guides)

“Exceptional Circumstances” - a Tough Test• Tiercé Ladbroke

— Licensor not present on secondary market (betting)— Televised racing not “essential” for bookmakers— Refusal to license did not prevent a new product

• Oscar Bronner— No elimination of competition on downstream market— Access (to distribution system) not “indispensable”

• IMS - a new meaning for “exceptional circumstances” ?

IMS

• The facts - a refusal to license the ‘1860’ brick structure• The Commission found

— A prima facie infringement of Article 82— Criteria for interim measures were satisfied

• The finding based on:— Refusal being likely to eliminate all competition in the relevant

market— Refusal incapable of objective justification— Access being indispensable, i.e. no actual or potential substitute

Recent News: Shift to Patents

• Liberal application of principles by national courts• Rotterdam court• Düsseldorf court

Exceptional Circumstances

• Magill list not exhaustive• Magill list exemplary• No new product necessary• No exclusion of all competition necessary

Magill in Light of Bronner - Rotterdam -

• Competition in same market• Customer should have choice

Magill in Light of Bronner - Düsseldorf -

• No actual or realistic substitute product available• Exclusion of competition by company requesting use• Refusal not justifiable

Magill applied to Patents

• Use of patent indispensable— Technical reasons— Expectations of market

• Refusal not justifiable— Costs of development amortized— Existing licensees bring no efficient competition