Academic journal article Law and Policy in International Business

International Antitrust and Intellectual Property Harmonization of the Interface

Academic journal article Law and Policy in International Business

International Antitrust and Intellectual Property Harmonization of the Interface

Article excerpt

I. INTRODUCTION

Intellectual property has become one of the most valuable assets of a large and growing number of domestic and international corporations. Intellectual property rights, whether the intellectual property is used by the owner or licensed to others, are the central means by which companies can internalize for a period of time, and thereby justify, their often substantial investment in research and development of complex products and services. In the absence of well-defined intellectual property rights, free-riding will reduce the value of investment and result in slower rates of economic progress and reduced consumer welfare. However, if competition laws overly restrict intellectual property rights, the restrictions create strong incentives for companies to limit the diffusion of both intellectual property and the products and services reliant on that intellectual property, thus limiting international trade. Consequently, the international antitrust treatment of intellectual property assets bears heavily on the extent of the development of international trade and, ultimately, the rate of progress toward creation of a single global economy.

Several challenges face the international competition law treatment of intellectual property rights. First, defining the scope of intellectual property rights can be complex. Second, careful analysis is required to differentiate restrictions and limitations on the use and licensing of intellectual property that affect competition inside the scope of intellectual property rights from restrictions and limitations that affect competition outside the scope of intellectual property rights. Third, there is a short run temptation to treat intellectual property not as part of an ongoing innovation process, but rather, solely as the result of a past innovation process. Thus, for intellectual property already in existence, competition authorities mistakenly may see no harm in seeking "more procompetitive outcomes" by promoting the free diffusion and exploitation by non-owners of existing intellectual property. The result, however, of regulating intellectual property rights substantially reduces the incentive to create new intellectual property.

This Article will briefly address some of the obstacles at the intersection of trade and competition in the multinational arena that have stimulated discussion, the programs and prospects for creating better global understanding and convergence, and some modest steps toward improved transparency and gradual convergence.

II. OBSTACLES TO INTERNATIONAL HARMONIZATION

Even in the case of mature competition regimes, diversity as to substantive antitrust standards is prevalent. (1) Progress has been made in the convergence of standards for the definition of relevant intellectual property rights, (2) but those definitions of rights are of limited importance compared to the standards under which the rights are enforced and licensed.

Unfortunately, the complexity of the issues sometimes hinders achievement of harmonization. Though intellectual property/antitrust issues have occupied the attention of courts, enforcers, and scholars for some time in the United States, a number of open questions remain. For example, the Supreme Court has yet to resolve certain potential conflicts between intellectual property and antitrust principles suggested in two important recent cases on the subject. (3)

Nonetheless, in the United States, certain basic principles have emerged that help to define the scope of intellectual property rights, their enforcement, and their licensing. For example, a patent owner who brings a lawsuit to enforce the statutory right to exclude others from making, using, or selling a patented invention generally is exempt from the antitrust laws. (4) Similarly, the United States generally does not apply the "essential facilities doctrine" to intellectual property. (5) Instead, the general rule is that, with limited exceptions, the owner of intellectual property, similar to any other property, may refuse in the United States to license that property. …

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