Intellectual Property & Antitrust Laws: Enforcement Guidelines Guofu

Intellectual Property & Antitrust Laws: Enforcement Guidelines Guofu

Intellectual Property & Antitrust Laws: Enforcement Guidelines Guofu Tan University of Southern California Department of Economics [email protected] USC CTLB Conference on the Application of Competition Policy to Technology and IP Licensing November 10, 2017 Competition and intellectual property (IP) protections are complements, in encouraging innovation and enhancing consumer welfare (Spulber, 2013). IP laws provide incentives for innovation, focusing on providing inventors with a return on their innovation.

A large economics literature on innovation incentives and pricing mechanisms for IP licensing Antitrust laws promote innovation and consumer welfare by prohibiting certain actions that may harm competition with respect to existing or new ways of serving consumers. IP licensing arrangements are typically welfare-enhancing and procompetitive. Nevertheless, antitrust concerns may arise. 2 Antitrust Guidelines Antitrust Guidelines for the Licensing of Intellectual Property, issued by the

U.S. Department of Justice and the Federal Trade Commission, January 12, 2017 Anti-Monopoly Guidelines on Abuse of Intellectual Property Rights, issued by the Anti-Monopoly Commission of the State Council, China (Draft for comments, March 23, 2017) ( 2017 3 23 ) Once formally published, the Chinese Guidelines shall act as the common guidelines for the NDRC, the MOFCOM and the SAIC. 3 Principles

Both Guidelines recognize that the intellectual property laws and the antitrust laws share the common purpose of promoting innovation and enhancing consumer welfare. The principles of analysis require the Chinese agencies to follow the same standard of regulation as other forms of property rights within the basic legal framework of analysis under the Anti-Monopoly Law (AML); take into account the specific features of the IPRs (e.g., the scope and nature); although the IPRs are an exclusive right, an undertaking shall not be presumed to be in dominance in the relevant market merely for holding the IP rights; acknowledge the pro-competitive effects of licensing on economic efficiency and innovation in the relevant markets.

4 Coverage of the Guidelines Analytical framework Defining relevant markets A set of factors/conditions to be considered for assessing pro& anti-competitive effects Monopoly agreements associated with IP rights Abuse of dominance in the context of IP rights including standard-essential patents (SEPs) Mergers involving IP rights 5

Defining Relevant Markets When rights to IP are marketed separately from the products in which they are used, it may be necessary to analyze the competitive effects of a licensing arrangement in a technology market. Technology markets: the IP that is licensed and its close substitutes. Both Guidelines recognize the importance of defining technology markets and possibly R&D markets, in addition to product markets. 6 Illustrating Examples The Chinese Guidelines offer a list of factors that the agencies shall consider, but do not explain or illustrate why and how each factor is relevant and important.

The US Guidelines use examples (10 examples and 90 footnotes) to illustrate how the US agencies analyze some common situations. 7 Excessive Pricing The necessity and applicability of the article on excessive pricing in the Chinese Guidelines. The Guidelines do not offer any specific methodologies (or examples) in how to

determine fair and reasonable royalty rates. The US Guidelines do not mention anything about FRAND or other commitments made by licensors. 8 Antitrust Safe Harbor The Chinese Guidelines distinguish IP agreements between competitors and the ones among non-competitors In order to benefit from this safe harbor, (1) the combined market share of competing undertakings in the relevant market may not exceed 20%; (2) the market share of any non-competing undertaking in the relevant market may not exceed 30%. The US Guidelines state that the Agencies will not challenge a restraint in an IP licensing arrangement if (1) the restraint is not facially anticompetitive and (2) the licensor and

its licensees collectively account for no more than 20% of each relevant market significantly affected by the restraint. 9 Summary Incentives derived from IP protection and competition are the primary and complementary motivators of innovation. The policy goal is to promote an environment in which inventors have the proper incentives and rewards meanwhile consumers can benefit from innovation.

Need to find the right balance between IP laws and antitrust laws. When enforcing antitrust laws, need to take into account the special features of IP. Both the US and Chinese Guidelines are quite useful, and details matter. 10

Recently Viewed Presentations

  • L/O Defining the family group - WordPress.com

    L/O Defining the family group - WordPress.com

    Types of Family. The Reconstituted Family . A reconstituted family is one which is often referred to as a 'step family'. This type of family still consists of parents and children although one of the parents may be a social...
  • 2016 Behavior Regulations

    2016 Behavior Regulations

    Provide an overview of Person's Planning Team obligations at all 5 levels of interventions for Challenging Behaviors at both initial approval and renewals. Give a description, required approval and required documentation for all 5 levels of interventions. Give examples of...
  • Token-Ring Networks

    Token-Ring Networks

    If a trunk line between access units breaks, The ring is wrapped, so the loop is restored Fiber Distributed Data Interface (FDDI) was a 100 Mbps token ring network technology that could spans tens of kilometers This made it an...
  • The Book of Mormon Keystone of Our Religion

    The Book of Mormon Keystone of Our Religion

    Moroni 10:4-5. 4 And when ye shall receive these things, I would exhort you that ye would ask God, the Eternal Father, in the name of Christ, if these things are not true; and if ye shall ask with a...
  • American Indian Cultural Communications

    American Indian Cultural Communications

    All-in-all, the CG mission is a part of Alaska history, and has brought both positive and negative impacts, including saving lives, helping communities, and our more difficult history, which includes as an example the bombing of the community of Angoon...
  • American Romanticism - San Leandro Unified School District

    American Romanticism - San Leandro Unified School District

    American Romanticism 1800 - 1860 We will walk with our own feet we will work with our own hands we will speak our own minds-Ralph Waldo Emerson Romanticism is the name given to those schools of thought that value feeling...
  • EVALUATION OF DRAFTSTOPPING WITHIN TYPE V COMBUSTIBLE CONCEALED

    EVALUATION OF DRAFTSTOPPING WITHIN TYPE V COMBUSTIBLE CONCEALED

    NFPA 13R versus NFPA 13 sprinkler protection for five-level pedestal buildings should be clarified in the next edition of the Florida Building Code if the Florida Building Commission wants to deviate from the national code. Gap Assessment.
  • Sadlier-Oxford Vocabulary Level E

    Sadlier-Oxford Vocabulary Level E

    Sadlier-OxfordVocabulary Level E. Unit #11 . To Allude (verb) Many comedies, including Family Guy, allude to (reference) films and culturally significant events for humorous effects. These allusions work best when the audience is familiar with the reference. ... Sadlier-Oxford Vocabulary...