Josef Drexl

The logic of power in the emerging European constitution: Game theory and the division of powers

The major institutions of government in the European Community are the Council of Ministers, the Parliament, the Court of Justice, and the Commission. The initial treaties prescribed a legislative process in which the Commission proposed, the Council enacted, and the Court interpreted. The Council enjoyed the exclusive power of legislation, and most of its enactments required unanimity. In contrast, the Parliament had, at most, a right to be consulted about legislation. In effect, the institutions of European government originally provided a framework for cooperation among ministers of the sovereign states. From this beginning, the European Community has evolved gradudly towards a democratic government. Specifically, majority rule is replacing unanimity in the Council, and the role of Parliament is increasing towards full partnership in the legislative process. Legislation now must follow majoritarian, bicameral procedures on some issues, and the scope of these issues will presumably widen. The obvious consequence of these changes is a decrease in the power of the Council and an increase in the power of Parliament. We use game theory to prove the not-so-obvious fact that majoritarianism in the Council increases the power of the Commission and, in the long run, decreases the power of the Court, whereas bicameralism has the opposite effect. Our analysis suggests a revaluation of the implementation of democracy in Europe. To be more precise, there are four procedures for European legislation that differ according to the extent that the Council must involve Parliament in making law. The procedures, arranged in order of increasing involvement of Parliament, are called unilateral, consultation, cooperation, and co-decision. A change from consultation to cooperation on an issue, and a change from cooperation to co-decision, obviously

Intellectual Property and Implementation of Recent Bilateral Trade Agreements in the EU

The European Union (EU) has concluded—and still is in the process of negotiating—a number of bilateral trade agreements with extensive provisions on intellectual property rights that partially go beyond what is required by the WTO/TRIPS Agreement (so-called “TRIPS-plus standards”). These agreements include the Economic Partnership Agreement (EPA) with the CARIFORUM States, the Free Trade Agreement with South Korea, the Association Agreement with Central America and the Trade Agreement with Columbia and Peru. There is a general assumption that these agreements only oblige the other contracting parties to change their intellectual property laws, whilst there is no need for the EU to take any implementation measures. This chapter questions this latter assumption by analysing, in particular, the rules of these agreements on criminal sanctions, genetic resources, transfer of technology and competition law and the general principles on the enhancement of sustainable development.

Real Knowledge is to Know the Extent of One's Own Ignorance: On the Consumer Harm Approach in Innovation-Related Competition Cases

Modern economics advocates an assessment of competition law cases in light of the effects of firm conduct on the relevant market. In many instances, law enforcers and also firms that have to assess the legality of their business models in advance will often have to predict the “likely” effects in the future. This obviously creates a problem of uncertainty. This article reviews this problem for the assessment of competition law cases in innovation-related markets. Thereby, three specific sets of cases are discussed: (1.) the GlaxoSmithKline cases in Europe, where the question was whether R&D intensive pharmaceutical companies should be allowed to restrain parallel trade between Member States in order to enhance their ability to invest in innovation, (2.) the European Microsoft case, and (3.) “pay-for-delay” settlements of patent litigation proceedings that involve a so-called “reverse payment” by the patent holder to the generic drugs producer for delaying the market entry of the generic drug. Thereby, the article aims to identify the most appropriate standard of liability against the background of the problem of uncertainty. It rejects the consumer harm standard which is accepted by the courts in the U.S. and traditionally rejected by the EU courts in favor of a concept of protecting the process of dynamic competition which focuses on the elements of rivalry, openness of the market, and consumer choice.

Research handbook on intellectual property and competition law

This comprehensive Handbook brings together contributions from American, Canadian, European, and Japanese writers to better explore the interface between competition and intellectual property law. Issues range from the fundamental to the specific, each considered from the angle of cartels, dominant positions, and mergers. Topics covered include, among others, technology licensing, the doctrine of exhaustion, network industries, innovation, patents, and copyright.

EU bilateral trade agreements and intellectual property : for better or worse?

Intellectual Property Protection in Economic Partnership- and Free trade Agreements.- Going Beyond TRIPS: Impact on International Law and Policy.- Emerging Elements for Reforming the International IP System.- Implementation of IP Provisions in EU Trade Agreements.

Patents and technological progress in a globalized world

From the contents Substantive Patent and Utility Model Law.- Limitations to Intellectual Property Protection.- Intellectual Property and Competition (Antitrust) Law.- Biotechnology, Pharmaceuticals and Patent Law.- Employee Invention Law.- Procedure, Enforcement, and Liability.- Protecting Technology against Unfair Competition.- Multijurisdictional Aspects of IP.- Recent Developments in National IP and Competition Legislation.- Intellectual Property and Public Policies.- Bibliography of Publications by Joseph Straus.

Collective Management of Copyrights and the EU Principle of Free Movement of Services after the OSA Judgment—In Favour of a More Balance Approach

On 20 February 2014, the Council of the European Union has adopted the new Directive on Collective Rights Management. In its Proposal for this Directive, the Commission argued that cross-border collective rights management services are liberalised pursuant to Article 16 of the Services Directive of 2006. Yet, only one week after the adoption of the new Directive, this view was rejected by the Court of Justice of the EU in the OSA judgment. This paper analyses the relationship between the principle of free movement of services and national sector-specific regulation of CMOs in more detail in order to explore to which extent the principle of free movement of services and the need for specific rules for collective management of copyrights could be better coordinated in the future.

AstraZeneca and the EU Sector Inquiry: When Do Patent Filings Violate Competition Law?

In its Pharmaceutical Sector Inquiry Report of 2009, the European Commission identified ‘defensive patent strategies’ as a potential anti-competitive abuse in the sense of Article 102 TFEU. Such strategies include in particular patent filings that may delay the market entry of generic drugs or obstruct innovation activity of other originator companies. Yet the Report refrains from a an in-depth legal analysis of such behaviour. With the objective of clarifying the legal implications of the Sector Inquiry Report, the article analyses the AstraZeneca judgment of the General Court of 2010 as a precedent for assessing the anti-competitive character of patent filings under EU competition law. Thereby, it is argued that patent law does not insulate filings against competition-law liability. Yet the judgment, which is limited to ‘static’ price competition between originator companies and generics producers, does not provide sufficient guidance for analysing harm to ‘dynamic’ competition in innovation among originator companies. In this regard, the article advocates a cautious approach, according to which a violation of EU competition law requires anti-competitive intent for which the party arguing a violation should carry the burden of proof. The article also refers to the Boehringer case, which was settled by the Commission in Summer 2011, after Boehringer agreed to give up its allegedly anti-competitive blocking patents.

Competition Law as Regulation

To what extent should competition agencies act as market regulators? Competition Law as Regulation provides numerous insights from competition scholars on new trends at the interface of competition law and sector-specific regulation. By relying on the experiences of a considerable number of different jurisdictions, and applying a comparative approach to the topic, this book constitutes an important addition to international research on the interface of competition and regulation. It addresses the fundamental issues of the subject, and contributes to legal theory and practice. Topics discussed include foundations of the complex relationship of competition law and regulation, new forms of advocacy powers of competition agencies, competition law enforcement in regulated industries in general, information and telecommunications markets, and competition law as regulation in IP-related markets.

The concept of trade-relatedness in times of post-TRIPS bilateralism

In 1994, by concluding the TRIPS Agreement as part of the new WTO system, states recognized the “trade-relatedness” of IPRs. Yet scholars have so far given very little attention to this concept. This chapter identifies three aspects of this idea, namely (1) as a legal concept, (2) as an economic justification for more advanced international IP standards, and (3) as a political strategy. During the last decade, this concept also migrated to many bilateral trade agreements in which “TRIPS-plus” standards were included. This development not only confirmed and strengthened the trade-relatedness of IPRs, it also requires a reassessment of the concept in order to judge the appropriateness of IP bilateralism. Indeed, the main research question of this chapter relates to the soundness of combining IP rules with trade rules. Whether this combination makes economic sense can be critically reviewed in the light of several considerations of economic theory. This economic analysis shows how the international IP system, starting with TRIPS and continuing with bilateral trade agreements, had to develop towards an inefficient expansion of IP protection. From the perspective of 2014, the conclusion is that the strategy to use trade concessions as a bargaining chip for higher IP standards for the purpose of promoting the competitiveness of technologically more advanced countries has not produced the expected results. The chapter strongly argues for reconsidering the current trade policy of technologically more advanced countries to push through ever-higher levels of protection in various forms of trade agreements.