Издательство Hart Publishing, 2006, -360 pp.
Encouraged by the demand for my monographs on distribution and technology transfer and by the welcome received by those on earlier group exemptions, I have prepared not just a commentary on the latest technology transfer block exemption.1 I have analysed it in the context of the case law of both the Commission and the Community courts in Luxembourg and of the Commission’s guidelines on technology transfer.
The Commission has taken great strides towards adopting a more economic approach. The most important development is its willingness to look ex ante: to compare what has happened with an agreement and its restrictions on conduct with what would have happened without it and without the restriction. Formerly, once licensor and licensee were producing substitute products, the Commission treated any restrictions of conduct in the agreement with greater hostility on the ground that the parties were competitors. Yet if the licensee could not legally have produced substitutes without a licence, the licence almost certainly increased competition and should have been cleared as not infringing Article 81.
Nevertheless, the Commission has moved only part of the way towards an economic approach. It accepts that the function of competition law is to increase consumer welfare not that of competitors, and that efficiencies made possible by licensing may lead to cheaper or better products or to products with additional functions. It adds that most vertical agreements are pro-competitive. Yet it refuses to balance the pro- and anti-competitive effects of a licence under Article 81(1), when the burden of proof is on the person alleging illegality, but only under Article 81(3) when a heavy standard of proof is required of the person alleging legality.
The burden of proof under Article 81(3) is particularly serious now that the block exemption is capped by market shares. Agreements that qualified under the former block exemption may not qualify under this. Many markets are difficult to define, but definitions of those affected by licensing are particularly arbitrary, because the analysis is prospective and the future hard to envisage. R & D may be financed by promises of licences when the technology is perfected. True, potential competition is not relevant in technology markets, but it is when analysing product markets. It will often be unclear whether the block exemption applies to a licence being negotiated. The conce that holders of very valuable patents may be forced to license them to competitors downstream has been reduced by the limitation of the special responsibility of a dominant firm under Article 82, most convincingly by Advocate-General Jacobs in Oscar Bronner2 and Syfait.3 Nevertheless, the doctrine of essential facilities hardly exists now in the US.4 Moreover, the US Agencies’ guidelines are more favourable to licensing. The heavy burden of proof is on the parties claiming that a licence infringes section 1 of the Sherman Act or section 5 of the Trade Commission Act. Even the agencies may drop objections if a court holds that the matter is goveed by the rule of reason.5
When the draft regulation was published for consultation there was great fear that licensing and even research and development in Europe would be chilled: such activities could be carried out elsewhere, particularly in the United States, and the products exported to Europe with the loss of many well paid and interesting jobs. Such fears have been greatly reduced by the modifications to both regulation and guidelines before adoption, but some conce remains.
In this book, after a short introduction to the tension between competition law and intellectual property with quotations from Schumpeter, I have analysed critically but shortly the case law on exhaustion because so much of the earlier case law was conceed with export bans and the use of intellectual property rights to induce investment by dealers and licensees by granting exclusive territories. After considering the status of guidelines from the Commission I analyse the early case law on licensing, mostly from the Commission.
Introduction – Tension Between Intellectual Property Rights (iprs) and Competition Rules and the Principle of Free Movement
Free Movement of Goods
Status of Various Sources of Law
Article 81.
The New Group Exemption for Technology Transfer – Regulation 772/04 (TTBER)
Recitals and Guidelines Not Limited to Agreements Exempted by the TTBER
Other Kinds of Commercial and Industrial Property Rights
Article 82.
General comment on iprs and competition
General conclusion
Appendices
Excerpts from the Treaty establishing the European Community Regulation 19/65
Regulation 772/2004
Commission’s guidelines on technology transfer
Commission’s guidelines on Article 81(3)
Encouraged by the demand for my monographs on distribution and technology transfer and by the welcome received by those on earlier group exemptions, I have prepared not just a commentary on the latest technology transfer block exemption.1 I have analysed it in the context of the case law of both the Commission and the Community courts in Luxembourg and of the Commission’s guidelines on technology transfer.
The Commission has taken great strides towards adopting a more economic approach. The most important development is its willingness to look ex ante: to compare what has happened with an agreement and its restrictions on conduct with what would have happened without it and without the restriction. Formerly, once licensor and licensee were producing substitute products, the Commission treated any restrictions of conduct in the agreement with greater hostility on the ground that the parties were competitors. Yet if the licensee could not legally have produced substitutes without a licence, the licence almost certainly increased competition and should have been cleared as not infringing Article 81.
Nevertheless, the Commission has moved only part of the way towards an economic approach. It accepts that the function of competition law is to increase consumer welfare not that of competitors, and that efficiencies made possible by licensing may lead to cheaper or better products or to products with additional functions. It adds that most vertical agreements are pro-competitive. Yet it refuses to balance the pro- and anti-competitive effects of a licence under Article 81(1), when the burden of proof is on the person alleging illegality, but only under Article 81(3) when a heavy standard of proof is required of the person alleging legality.
The burden of proof under Article 81(3) is particularly serious now that the block exemption is capped by market shares. Agreements that qualified under the former block exemption may not qualify under this. Many markets are difficult to define, but definitions of those affected by licensing are particularly arbitrary, because the analysis is prospective and the future hard to envisage. R & D may be financed by promises of licences when the technology is perfected. True, potential competition is not relevant in technology markets, but it is when analysing product markets. It will often be unclear whether the block exemption applies to a licence being negotiated. The conce that holders of very valuable patents may be forced to license them to competitors downstream has been reduced by the limitation of the special responsibility of a dominant firm under Article 82, most convincingly by Advocate-General Jacobs in Oscar Bronner2 and Syfait.3 Nevertheless, the doctrine of essential facilities hardly exists now in the US.4 Moreover, the US Agencies’ guidelines are more favourable to licensing. The heavy burden of proof is on the parties claiming that a licence infringes section 1 of the Sherman Act or section 5 of the Trade Commission Act. Even the agencies may drop objections if a court holds that the matter is goveed by the rule of reason.5
When the draft regulation was published for consultation there was great fear that licensing and even research and development in Europe would be chilled: such activities could be carried out elsewhere, particularly in the United States, and the products exported to Europe with the loss of many well paid and interesting jobs. Such fears have been greatly reduced by the modifications to both regulation and guidelines before adoption, but some conce remains.
In this book, after a short introduction to the tension between competition law and intellectual property with quotations from Schumpeter, I have analysed critically but shortly the case law on exhaustion because so much of the earlier case law was conceed with export bans and the use of intellectual property rights to induce investment by dealers and licensees by granting exclusive territories. After considering the status of guidelines from the Commission I analyse the early case law on licensing, mostly from the Commission.
Introduction – Tension Between Intellectual Property Rights (iprs) and Competition Rules and the Principle of Free Movement
Free Movement of Goods
Status of Various Sources of Law
Article 81.
The New Group Exemption for Technology Transfer – Regulation 772/04 (TTBER)
Recitals and Guidelines Not Limited to Agreements Exempted by the TTBER
Other Kinds of Commercial and Industrial Property Rights
Article 82.
General comment on iprs and competition
General conclusion
Appendices
Excerpts from the Treaty establishing the European Community Regulation 19/65
Regulation 772/2004
Commission’s guidelines on technology transfer
Commission’s guidelines on Article 81(3)