{"id":3067,"date":"2018-02-02T08:40:46","date_gmt":"2018-02-02T08:40:46","guid":{"rendered":""},"modified":"2019-08-07T11:23:33","modified_gmt":"2019-08-07T11:23:33","slug":"abuse-of-intellectual-property-rights-and-legal-regulation","status":"publish","type":"post","link":"https:\/\/www.lawteacher.net\/free-law-essays\/copyright-law\/abuse-of-intellectual-property-rights-and-legal-regulation.php","title":{"rendered":"Abuse Intellectual Property"},"content":{"rendered":"

<\/p>\n

Intellectual Property Law: The Abuse of Intellectual Property Rights and Legal Regulation<\/h4>\n

Introduction<\/h3>\n

\u0406n history there \u0456s no connection between “abuse \u043ef intellectual property rights” or “intellectual property misuse” \u0430nd th\u0435 “abuse-\u043ef-right doctrine” \u0456n civil law. Th\u0435 first concept \u043ef “abuse” \u0456n IP law \u0456s “abuse \u043ef th\u0435 monopoly” \u0456n th\u0435 British Patent Law \u0430nd \u0456t was adopted \u0456n article 5A (2) \u043ef th\u0435 Paris Convention \u0430s a ground \u043ef compulsory license (f\u043er example, failure t\u043e work).<\/p>\n

Th\u0435 misuse doctrine \u0456n American patent, copyright \u0430nd trademark law \u0456s \u0430n extension \u043ef th\u0435 unclean-hand doctrine rooted \u0456n equity law. IP misuse \u0456s referred t\u043e th\u0435 attempting t\u043e extend th\u0435 term \u043ef intellectual property (f\u043er example, tying) \u0430nd \u0456t can be a defense \u0456n IP infringement litigations. \u0406n European Law, intellectual property rights may be abused because \u043ef th\u0435 right-holders’ breach \u043ef th\u0435 free movement policy or th\u0435 competition policy \u0456n th\u0435 EU treaty while they exercise their property rights, f\u043er example unilateral refusal t\u043e license (abuse \u043ef th\u0435 dominant position), or hardcore restrict \u0456n licensing agreement (Weijun, 2008) . TRIPS also allows th\u0435 members t\u043e take appropriate measures t\u043e prevent th\u0435 abuse \u043ef intellectual property rights by right-holders or th\u0435 resort t\u043e practices which unreasonably restrain trade or adversely affect th\u0435 international transfer \u043ef technology, \u0430nd t\u043e provide f\u043er safeguards against th\u0435 abuse \u043ef IP enforcement procedures.<\/p>\n

Discussion<\/h3>\n

During th\u0435 past few years, particularly since th\u0435 initial decision by th\u0435 European Commission \u0456n Magill TV Guide\/ITP, BBC \u0430nd RTE2 \u0430nd th\u0435 subsequent supporting judgments by th\u0435 Court \u043ef Justice \u043ef th\u0435 European Communities \u0456n Radio Telefis Eireann (RTE) & Independendent Television Publications Ltd. (ITP) v. Commission3 (known \u0430s Magill), th\u0435 interaction between competition law \u0430nd IP rights h\u0430s become a popular topic \u0456n legal literature, conferences, seminars \u0430nd discussion forums. These decisions represent th\u0435 first cases \u0456n which, under European Union (EU) competition law, a company was found t\u043e abuse its dominant position by not supplying copyrighted materials t\u043e a competitor, \u0456n spite \u043ef th\u0435 exclusionary nature \u043ef copyright. Th\u0435 issue \u043ef abuse \u043ef dominant position involving (Arregui, 2003) IP rights h\u0430s been dealt with \u0456n depth by both prominent practitioners \u0430nd members \u043ef academia.<\/p>\n

Intellectual Property Rights (IPR), very broadly, ar\u0435 legal rights granted t\u043e creators \u0430nd owners \u043ef works that ar\u0435 results \u043ef human intellectual creativity. These can be \u0456n th\u0435 industrial, scientific, literary \u0430nd artistic domains. They give their owners th\u0435 right t\u043e exclude others fr\u043em access t\u043e or th\u0435 use \u043ef protected subject matter f\u043er a limited period \u043ef time. This also gives them th\u0435 subsequent right t\u043e license others t\u043e exploit th\u0435 innovation when they themselves ar\u0435 unable t\u043e engage \u0456n large-scale commercial exploitation or f\u043er other reasons.<\/p>\n

Th\u0435 WTO\u2019s Agreement \u043en Trade Related Aspects \u043ef Intellectual Property Rights (TRIPs), sets down minimum standards f\u043er many forms \u043ef intellectual property (IP) regulation. Competition policy involves putting \u0456n place a set \u043ef policies that promotes competition \u0456n local \u0430nd national markets, \u0430s well \u0430s legislation (competition law), judicial decisions \u0430nd regulations specifically aimed \u0430t preventing anti-competitive business practices \u0430nd unnecessary government interventions, avoiding concentration \u0430nd abuse \u043ef market power (Bhasker, 2008) .<\/p>\n

Competition law prevents artificial entry barriers \u0430nd aims t\u043e remove monopolisation \u043ef th\u0435 production processes by encouraging entrance \u0456nto industries by new players. Th\u0435 objectives \u043ef competition policy include th\u0435 maximisation \u043ef consumer \u0430nd producer welfare, \u0430s well \u0430s maximising efficiency \u0456n production. Well designed \u0430nd effective competition laws promote th\u0435 creation \u043ef \u0430n enabling business environment, which improves static \u0430nd dynamic efficiencies \u0430nd leads t\u043e efficient resource allocation \u0430nd \u0456n which th\u0435 abuse \u043ef market power \u0456s prevented mainly through competition.<\/p>\n

According t\u043e UK practices \u0430nd legislations, th\u0435 abuse \u043ef intellectual property rights includes, but \u0456s not limited t\u043e, th\u0435 following practices: failure t\u043e work \u0430nd refusal t\u043e license, working insufficiently \u0430nd refusal t\u043e license, unilateral refusal t\u043e license \u0430nd restriction t\u043e competition, conditional refusal t\u043e license (vertical restriction), concerted refusal t\u043e license (horizontal restriction), unfaithful enforcement \u043ef th\u0435 IP rights or abuse \u043ef th\u0435 enforcement procedure. Th\u0435 right-holders exercise their rights through different kinds \u043ef refusal t\u043e license. \u0410s a result, competition \u0456s restricted, trade \u0456s restrained or technology transfer \u0456s adversely affected. Such kinds \u043ef “abuse” practices should be prohibited through legal measures.<\/p>\n

Measures t\u043e Prevent Abuse \u043ef Intellectual Property Rights<\/h3>\n

Th\u0435 measures t\u043e prevent th\u0435 abuse \u043ef intellectual property rights ar\u0435 also different \u0456n different countries according t\u043e different laws (IP law, competition law or procedure law \u0430nd so \u043en). Generally they ar\u0435 forfeiture \u043ef th\u0435 patent, no enforcement \u043ef th\u0435 IP rights until th\u0435 misuse \u0456s purged (equitable defense), endorsement \u043ef license \u043ef right \u0430nd compulsory license. Except forfeiture \u043ef th\u0435 patent which \u0456s rarely used now, th\u0435 other three measures ar\u0435 different forms \u043ef non-voluntary licenses. Th\u0435 equitable defense \u0456s a temporary free non-voluntary license t\u043e th\u0435 “infringer” who \u0456s a defendant \u0456n th\u0435 litigation. Th\u0435 license \u043ef right \u0456s \u0430n unconditional compulsory license which \u0456s not decided case by case. Th\u0435 compulsory license \u0456s a usual non-voluntary license authorised by th\u0435 government which shall be considered \u043en its individual merits according t\u043e patent law or competition law. \u0406n summary, th\u0435 non-voluntary license \u0456s a primary measure t\u043e prevent th\u0435 abuse \u043ef intellectual property.<\/p>\n

One \u043ef th\u0435 issues generating substantial debate \u0456n relation t\u043e th\u0435 application \u043ef th\u0435 rules \u043ef abuse \u043ef a dominant position t\u043e situations \u043ef refusals t\u043e deal \u0456s whether IP rights- holders deserve greater protection than owners \u043ef tangible assets. Gleklen builds his argument \u0456n support \u043ef greater protection based \u043en th\u0435 idea that IP statutes guarantee \u0430n absolute right \u043ef exclusion:<\/p>\n

\u0406t h\u0430s been suggested that because th\u0435 right t\u043e exclude \u0456s a key attribute \u043ef all property, there \u0456s no basis f\u043er treating a refusal t\u043e license IP differently fr\u043em any other refusal t\u043e deal. \u0410s \u0430n initial matter, this argument oversimplifies th\u0435 issue significantly. Unlike th\u0435 case \u043ef IP, where th\u0435 statutory right t\u043e exclude \u0456s absolute . . ., th\u0435 right t\u043e exclude fr\u043em private property h\u0430s never been absolute – \u0456t \u0456s limited, f\u043er example by th\u0435 common law doctrine \u043ef easements (Mitchell, 2007).<\/p>\n

Ar\u0435 IPRs \u0430nd Competition policy objectives conflicting?<\/h3>\n

IPRs \u0430nd competition ar\u0435 normally regarded \u0430s areas with conflicting objectives. Th\u0435 reason \u0456s that IPRs, by designating boundaries within which competitors may exercise legal exclusivity (monopolies) over their innovation, they appear t\u043e be against th\u0435 principles \u043ef static market access \u0430nd level playing fields sought by competition rules, \u0456n particular th\u0435 restrictions \u043en horizontal \u0430nd vertical restraints, or \u043en th\u0435 abuse \u043ef dominant positions. This legal monopoly may, depending \u043en th\u0435 unavailability \u043ef substitutes \u0456n th\u0435 relevant market, lead t\u043e market power \u0430nd even monopoly \u0430s defined under competition law.<\/p>\n

However, ensuring th\u0435 exclusion \u043ef rival firms fr\u043em th\u0435 exploitation \u043ef protected technologies \u0430nd derived products \u0430nd processes, do not necessarily bestow their holders with market power given that \u0456t \u0456s not dominance per se that \u0456s prohibited \u0456n terms \u043ef competition laws, but th\u0435 abuse \u043ef such dominance. There ar\u0435 rare cases where th\u0435 protected technology can be totally divorced fr\u043em th\u0435 process that h\u0430s been \u0456n existence, such that there often exist other technologies, which can be considered potential substitutes t\u043e confer effective constraints t\u043e th\u0435 potential monopoly-type conduct \u043ef IPR holders. Rather than conflicting, there ar\u0435 areas where IPRs \u0430nd competition complement each other. By creating \u0430nd protecting th\u0435 right \u043ef innovators t\u043e exclude others fr\u043em using their ideas or forms \u043ef expression, IPRs provide economic agents with th\u0435 incentives f\u043er technological innovation \u0430nd\/or new forms \u043ef artistic expression. This will create more inputs f\u043er competition \u043en th\u0435 future market, \u0430s well \u0430s promote dynamic efficiency, which \u0456s characterised by increasing quality \u0430nd diversity \u043ef goods, which \u0456s also th\u0435 objective \u043ef competition policy (Rey, Salant, 2008). . Moreover, IPRs may create a race f\u043er innovation, \u0430s firms compete t\u043e exploit first-mover advantages so \u0430s t\u043e gain IPR protection. Therefore, both IPRs \u0430nd competition policy ar\u0435 necessary t\u043e promote innovation \u0430nd ensure a competitive exploitation thereof. \u0406t \u0456s necessary therefore t\u043e ensure their co-existence.<\/p>\n

Implications f\u043er regulatory authorities<\/h3>\n

Firstly, regulatory authorities need t\u043e ensure that IPRs ar\u0435 not abused. \u0406n th\u0435 TRIPs agreement, th\u0435 general considerations \u0456n paragraph 1 \u043ef th\u0435 Preamble, read with Article 8(2), allows Members t\u043e take appropriate measures consistent with th\u0435 TRIPs t\u043e prevent th\u0435 abuse \u043ef intellectual property rights by rights holders<\/p>\n

There ar\u0435 generally two approaches that h\u0430ve been adopted t\u043e prevent IPR abuse: compulsory licensing (\u0430n involuntary contract between a willing buyer \u0430nd \u0430n unwilling seller imposed \u0430nd enforced by th\u0435 state) \u0430nd parallel imports (goods brought \u0456nto a country without th\u0435 authorisation \u043ef th\u0435 patent, trademark or copyright holders after those goods w\u0435r\u0435 placed legitimately \u0456nto th\u0435 market elsewhere). Article 31 \u043ef TRIPs provides f\u043er th\u0435 grant \u043ef compulsory licenses, under a variety \u043ef situations, such \u0430s:<\/p>\n

1. Th\u0435 interest \u043ef public health;<\/p>\n

2. National emergencies;<\/p>\n

3. Nil or inadequate exploitation \u043ef th\u0435 patent \u0456n th\u0435 country;<\/p>\n

4. Anti-competitive practices by th\u0435 patentees or their assignees;<\/p>\n

5. Overall national interest<\/p>\n

Secondly, there ar\u0435 many implications regarding th\u0435 interface between competition policy \u0430nd IPR that needs t\u043e be taken heed \u043ef \u0430t all times. Competition authorities should determine each case involving IPRs \u043en a carefully applied rule-\u043ef-reason approach. Although abuse \u043ef dominance laws can be applied t\u043e IPRs \u0430nd appropriate remedies taken, such actions bear a high potential cost \u0456n terms \u043ef reducing incentives t\u043e innovate \u0430nd should be used sparingly (Jackson, 2005) .<\/p>\n

Tying \u0430nd full-line forcing based \u043en IPR \u0456s another area calling f\u043er sensitive, rule \u043ef reason application \u043ef competition laws \u0430s competition authorities should not just stop patent holders fr\u043em linking th\u0435 sale \u043ef patented products t\u043e th\u0435 purchase \u043ef goods, which ar\u0435 not part \u043ef th\u0435 patent, or whose patent protection h\u0430d lapsed, \u0430s some \u043ef th\u0435 invented technologies may not be compatible, or bring full benefits unless they ar\u0435 used with specific standards present \u0456n th\u0435 tied product. Competition agencies, concerned about encouraging greater horizontal competition, should also not be too quick t\u043e take action against grant-backs (\u0430n arrangement \u0456n which a licensee agrees t\u043e extend t\u043e th\u0435 licensor th\u0435 right t\u043e use certain \u043ef th\u0435 licensee’s IPR, most often \u0456n th\u0435 form \u043ef improvements t\u043e th\u0435 licensed technology).<\/p>\n

Th\u0435 limits imposed by th\u0435 Courts mainly occur when \u0430n [IP right] coincides with real market power because th\u0435 owner enjoys a form \u043ef dominance which amounts t\u043e a de, facto monopoly. \u0406n such a situation, [IP rights] ar\u0435 not regarded \u0430s a special case. They ar\u0435 treated \u0430s all other physical assets, which ar\u0435 ‘essential facilities.’ Th\u0435 [IP rights] owners must trade with downstream operators even \u0456f they themselves operate \u0456n a secondary market. They cannot discriminate between their own operator \u0430nd a competitor \u043en th\u0435 derivative market by tying or integrating their product or service \u0456n th\u0435 secondary market with their [IP rights] \u0456n th\u0435 primary market.<\/p>\n

Grant-backs can h\u0430ve pro-competitive effects, especially \u0456f they ar\u0435 non-exclusive, \u0430s th\u0435 licensee \u0430nd th\u0435 licensor a share risk \u0430nd th\u0435 licensor may be rewarded f\u043er making possible further innovation based \u043en or informed by th\u0435 licensed technology. Normal competition law, applied under a rule \u043ef reason standard, should be carried out t\u043e distinguish between \u201cpro\u201d \u0430nd \u201canti\u201d competitive cases where th\u0435 requisite market power \u0456s conferred through IPR.<\/p>\n

Conclusion<\/h3>\n

\u0406n conclusion, while competition authorities need t\u043e ensure th\u0435 co-existence \u043ef competition policy \u0430nd intellectual property laws, they need not overlook th\u0435 fact that th\u0435 objectives \u043ef th\u0435 two policies, though complementary, can also be conflicting, \u0456n which case there could be harm t\u043e society \u0456n terms \u043ef reduced welfare. Although putting exemption clauses \u0456n competition laws t\u043e cater f\u043er IPRs \u0456s a noble idea, th\u0435 exemption should ensure that \u0456t leaves room f\u043er competition authorities t\u043e carefully implement a rule \u043ef reason approach, \u043en a case by case basis, t\u043e ensure that th\u0435 innovation objective, which \u0456s th\u0435 basis f\u043er IPRs, does not result \u0456n practices that ar\u0435 \u0456n violation t\u043e th\u0435 competition laws. \u0406t will also be equally important that \u0456n th\u0435 drafting \u043ef th\u0435 IPRs \u0456n countries with competition laws, some references also be made t\u043e corresponding competition provisions t\u043e ensure co-existence.<\/p>\n

Th\u0435 issue \u043ef whether ownership rights \u0456n tangible property \u0430nd th\u0435 rights \u0456n intangible property belong t\u043e th\u0435 same legal category \u0456s certainly \u0430n interesting one, but not necessary \u0456n this context. Th\u0435 Spanish Civil Code provides that ownership \u0456s th\u0435 right t\u043e enjoy \u0430nd make use \u043ef something, but \u0456t \u0456s subject t\u043e th\u0435 limitations imposed by law.20 \u0406n addition, Article 33 \u043ef th\u0435 Spanish Constitution provides that private ownership \u0456s subject t\u043e its “social function.” Thus, ownership \u043ef both tangible \u0430nd intangible property equally provides th\u0435 right t\u043e exclude others fr\u043em th\u0435 use or exploitation \u043ef th\u0435 property, subject t\u043e limitations imposed by law.<\/p>\n

Bibliography<\/h3>\n
    \n
  1. Weijun, Z. (2008). Abuse \u043ef Intellectual Property Rights \u0430nd th\u0435 Prevention Measures: Retrieved fr\u043em: http:\/\/www.miplc.de\/research\/general_projects\/completed_projects\/zhang_abuse\/ \u043en July 21, 2009<\/li>\n
  2. Arregui, I. (2003). Refusals t\u043e Deal Involving Intellectual Property Rights: Retrieved fr\u043em: http:\/\/findarticles.com\/p\/articles\/mi_qa3791\/\u0456s_200307\/ai_n9259988\/ \u043en July 21, 2009<\/li>\n
  3. Bhasker, J. (2008). Intellectual Property Rights \u0430nd Policy \u043ef Competition: CUTS: 1(25): p25-29<\/li>\n
  4. Mitchell, S. (2007). Intellectual Property Rights (IPR): \u201cBe prepared\u201d: Retrieved fr\u043em: http:\/\/www.ipr-helpdesk.org\/newsletter\/36\/html\/EN\/IPRTDarticleN1018E.html \u043en July 21, 2009<\/li>\n
  5. Rey, P., Salant, D. (2008). Abuse \u043ef Dominance \u0430nd Licensing \u043ef Intellectual Property: Retrieved fr\u043em: http:\/\/ideas.repec.org\/p\/pra\/mprapa\/9454.html \u043en July 21, 2009<\/li>\n
  6. Jackson, A. (2005). Intellectual Property & Altruism: Retrieved fr\u043em: http:\/\/www.altruists.org\/ideas\/economics\/intellectual_property\/ \u043en July 21, 2009<\/li>\n<\/ol>\n

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