Hanns Ullrich

Expansionist Intellectual Property Protection and Reductionist Competition Rules - A TRIPS Perspective

The article is divided into two parts. In the first, an examination of the competition rules in the TRIPS Agreement confirms the authority of Contracting States to develop their own antitrust policy regarding IP-related restrictive practices, provided this is done consistently with the TRIPS principles of IP protection. In the second part, the preceding analysis is confronted with the new reality of IP policies, the changed function and modes of exploitation of protection in the innovation-driven, globalized high tech economy. I argue that the backward-looking focus of TRIPS competition rules on technology dissemination does not match the actual trend of cooperation-based innovation, since, there, a level playing field may only be established by early participation in the innovation process and by early access to enabling information. As industrialized countries have revised their competition policy with a view to supporting group innovation and additionally enhancing the incentives resulting from IP protection, referral to TRIPS competition rules as a model for domestic antitrust law might contribute to deepening rather then overcoming the technology dependence of developing countries. Oxford University Press 2004; all rights reserved, Oxford University Press.

The Unitary Patent Package: Twelve Reasons for Concern

A balanced, innovation-friendly and uniform patent system is indispensable for Europe. However, the latest EU proposal for a patent package (Patent Regulation and flanking court system) is both dangerous and misguided. While a superficial glance may create the false impression of a patent law advancement through the proposal, it instead actually threatens to forestall the necessary legal progress and innovation capacities for the foreseeable future. It might prove disastrous to implement a patent system which is already known to be detrimental from both the legal as well as the innovation perspectives. This paper provides a short introduction to the major reasons for concern regarding the current proposals and explains why it is imperative to reconsider the proposals entirely afresh.

Patent Protection in Europe: Integrating Europe into the Community or the Community into Europe?

Patent protection in Europe basically rests on two pillars: national grants or grants from the European Patent Organisation (EPO). The EPO grants patents by a centralised procedure with uniform conditions, but once granted the patents become national and subject to the divergent national laws of EPO–Member States. The system has been very successful, so successful, indeed, that it overshadowed the Community’s many unsuccessful attempts to set up a Community patent system of its own by way of a convention between Member States. As the Commission has recently stepped in by proposing the establishment of a Community Patent system by way of regulation, a kind of ‘cooperative rivalry’ has arisen between the Community and the EPO about how to unify patent protection in Europe. This rivalry not only mirrors divergent views on the politico–economic functions of the patent system, but also is illustrative of different concepts of regional integration in a context of global competition for innovation.

Mandatory Licensing Under Patent Law and Competition Law: Different Concerns, Complementary Roles

The purpose of this chapter is limited to defining the differences of the functions and of the operation of compulsory licences, which typically are available under patent law, on one hand, or, on the other, are imposed as a matter of enforcing the antitrust laws. The thesis of this contribution is that each of patent law’s compulsory licensing rules does (and ought to) follow its own distinct rationale. Their common denominator is that they are specific to the systematic operation of patent protection as an incentive mechanism for innovation. By contrast, competition law constitutes part of the framework regulation of the market. Where its application results in imposing licensing obligations on patentees, it does so in order to correct an unjustified restriction of competition. This remedial function of antitrust-related licensing obligations is complementary to but different from patent law’s rules on compulsory licensing. The different functions of system-supportive or system-intrinsic mandatory licensing rules and competition-related obligations also mean that before introducing new or broadening existing provisions on compulsory licences a proper diagnosis has to be made of the ill that they are supposed to cure.

The Political Foundations of TRIPS Revisited

The contribution revisits the political foundations of the TRIPS Agreement with a view to determine its role and functioning under the changed socio-economic geopolitical conditions of today’s world economic order. The Agreement, which was concluded as part of and under the pressure of the GATT/WTO trade package, provides for internationally uniform standards of adequate protection of intellectual property in all States Members of the WTO, regardless of the differences of their economic development, industrial structures and social needs. As a global “deep trade agreement”, which governs not only cross border trade, but Members’ internal markets, it raises issues both of its compatibility with the principle of comparative advantage underlying international trade, and of the legitimacy of its interfering with domestic market regulation. The flexibilities, which have been built into the TRIPS Agreement, may mitigate concerns. However, the growing new bi- and pluri-lateralism of regional free trade agreements with their asymmetric intellectual property rules, the re-distribution of economic power among the developed and the emerging or rather the emerged countries, and the nature of strategic competition between globally acting multinational corporations have changed the rules of the game. The task ahead is to re-conceptualize the TRIPS Agreement as a framework regulation for national innovation markets, which at the same time are integrated into global markets to varying degrees. As such, it would form part of an open international economic law, which, in its turn, needs to be developed in order to overcome the rigid and already fading paradigms of international trade law. Only such a vision will help to accommodate intellectual property protection with the large diversity of industrial policies and with the many intellectual property-related public interests and policies, which WTO Members may or do adhere to.

Intellectual property, market power and the public interest

The main objective of the contributions to this book is to bring together two seemingly different strands of thought: the competition-law analysis of the exercise of intellectual property, and the discussion about the proper limits of protection, which at present takes place inside the intellectual property community. Both are burdened with their own problems, particularly so in Europe, where market integration and the divide between exclusionary and exploitative abuses ask for a more dimensional approach, and where the shaping of intellectual property protection is under not only the influence of many interests and policies, but a multi-level exercise of the Community and its member states. The question is whether, nevertheless, there is a common concern, or whether the frequently asserted convergence of the operation and of the goals of competition law and intellectual property law does not mask a fundamental difference - namely that of, on the one hand, protecting freedom of competition against welfare-reducing restrictions of competition only, and, on the other, limiting the protection of exclusive rights in the (public) interest of maintaining free access to general knowledge. The purpose of the workshop held in 2007 at the College of Europe, Bruges, and whose results are published here, was to ask which role market power plays in either context, which role it may legitimately play, and which role it ought not to play. A tentative answer might be found in the general principle that, just as intellectual property does not enjoy a particular status under competition law, so competition law may not come as a white knight to rescue intellectual property protection from itself. However, the meaning of that principle differs according to both the context of the acquisition and the exploitation of intellectual property, and it differs from one area of intellectual property to the other. Therefore, an attempt has also been made to cover more facets of the prism-like complex of problems than is generally done.

Legal Protection of Innovative Technologies: Property or Policy?

In the European Community, a new body of intellectual property law has been built up that lends itself rather well for an examination of whether the development of IPR-protection for new technologies follows sound principles. There is, indeed, a number of current legal issues of intellectual property protection which appear to be almost entirely unbeatable, such as defining the proper conditions for access to technological information under copyright law and database protection schemes, the determination of spare-part protection under design law, and the treatment of international exhaustion of intellectual property rights; and there is a widespread unease about the scope of available protection (biotechnology, business methods). These problems do not only result from the difficulties of adapting the IPR-system to new technological realities. Rather they also mirror changes in our perception of what the IPR-system should do and can be expected to do. IPR’s are no longer considered as entitlements granted for merit, but as a means to obtain optimal economic results. The institutional perception of IPR as private property has given way to an instrumental approach using IPR for specific macro- and microeconomic purposes. Where such purposes are in conflict, it is impossible to solve them by systemic value judgements. The task ahead is to return to a systems understanding that allows us to solve such conflicts on the basis of overarching principles. The purpose of the paper is to explain the problems, not to develop the principles that bring the solution to the problems.