Technology Transfer and the New EU Competition Rules Intellectual Property Licensing after Modernisation

by Anderman, Steven D.; Kallaugher, John

• ISBN13: 9780199282142
• ISBN10: 0199282145
• Format: Hardcover
• Copyright: 2006-06-01
• Publisher: Oxford University Press

Summary

The new Technology Transfer Block Exemption Regulation (in force from May 1, 2004) signals a profound change in the nature of the regulatory framework for technology licensing under EU competition law. This book examines the new Regulation in detail, placing it in the wider context of: (i) the modernisation reforms of EC competition law; and (ii) the treatment of IP rights over technology more generally. The book also considers the approach to assessment of IP issues set out in the Guidelines that accompany the Regulation; the authors discuss their legal basis and, where appropriate, criticise the approach taken by the Guidelines where the legal basis is unsure.

Author Biography

Steven D. Anderman is Professor of Law at Essex University. His work as Expert on Competition Policy to the Economic and Social Committee of the EU since 1984 has included succeeding Patent and Know-how Block Exemption Regulations, including the current Technology Transfer Block Exemption Regulations, the Merger Control Regulation, and the Vertical, Horizontal and Modernisation Regulations. He has also taken part in various advisory groups preparing the UK Competition Act 1998, and made presentations to the Intellectual Property Advisory Committee of the UK Patent Office on issues of competition law and the exercise of IPRs and on IP research programmes. John Kallaugher is Partner in the Global Antitrust and Competition Practice at Latham and Watkins. He has a broad practice touching all areas of competition law. He has represented clients from many industrial sectors in competition cases before the Commission, national competition authorites, Community Courts, national courts and arbitral tribunals. He is also Visiting Professor at University College London, where he teaches comparative US, EC, antitrust and competition law.

Table of Contents

Table of Cases	xiii
Table of Legislation, Treaties and Conventions	xix
I. INTRODUCTION
Introduction
Introduction	1	(10)
Background---the Relationship between Competition Law and IP	11	(5)
The New Legal Framework	16
The Development of the Regulatory Framework for IP Licensing in the EC
Introduction	1	(3)
Stage I: Before the BERs	4	(38)
The pre-Grundig years	4	(5)
The post-Grundig years	9	(18)
The Court and the concept of restriction of competition	27	(14)
Non-territorial restraints and restrictions of competition	41	(1)
Stage II: The Development of Block Exemption Regulations for Technology Transfer Agreements	42	(21)
The Patent Licensing Block Exemption Regulation (2349/84)	43	(5)
The Know-how Block Exemption Regulation (556/89)	48	(4)
The Unified Technology Transfer-Block Exemption Regulation (240/96)	52	(11)
Stage III: The Revision of TTBER in a Modernised Setting	63
II. THE NEW FRAMEWORK FOR ANALYSIS OF IP ISSUES
The `Modernisation' of EU Competition Law Enforcement---the New Analytical Paradigm for Applying Article 81
Introduction	1	(2)
Article 81 in the Old Regime---Ordoliberalism, Legal Formalism, and Prescriptive Block Exemptions	3	(8)
The Ordoliberal ideal of competition law	3	(2)
Legal formalism in Article 81(1)	5	(2)
The prescriptive block exemption	7	(1)
The limits of the old regime and the drive for change	8	(3)
The `Modernised' Approach to Article 81	11	(4)
Applying the New Paradigm---Structure of Analysis under Article 81	15	(26)
Article 81(1)	15	(10)
Article 81(3)	25	(16)
Conclusion---A Structure for Analysis under the New Paradigm	41
Applying the Economics-based Approach to Article 81: Assessing Competitive Harm and Economic Benefit
Introduction	1	(1)
Policy Goals and Key Concepts	2	(10)
The goals of competition policy---economic efficiency, consumer welfare and the nature of `competition'	2	(10)
The Benefits of Conduct or Structural Change---Static and Dynamic Efficiency	12	(4)
Static efficiency---allocative and productive efficiencies	13	(1)
Dynamic efficiency	14	(2)
Controlling `Anticompetitive' Agreements---the Role of Article 81	16	(8)
How `agreements' lead to competitive harm	16	(1)
How `agreements' lead to coordinated effects	17	(1)
How `agreements' lead to unilateral effects	18	(1)
How `agreements' lead to a reduction in dynamic efficiency	19	(1)
How `restrictive' agreements lead to consumer benefits	20	(4)
`Horizontal' and `Vertical' Agreements	24	(42)
Horizontal agreements and consumer harm	25	(20)
Vertical agreements and consumer harm	45	(21)
Assessing Economic Benefits under the New Paradigm	66	(16)
General concepts	66	(3)
Economic benefits of horizontal agreements	69	(9)
Economic benefits of vertical restrictions	78	(4)
Economic Assessment under the New Paradigm---Conclusion	82
IP Licensing under the New Paradigm
Introduction	1	(1)
Applying the Paradigm to IP Licensing---Step-by-Step	2	(27)
Step one---is there an `agreement' or `concerted practice' between `undertakings'?	3	(2)
Step two---is the agreement `restrictive' for the purposes of Article 81(1)?	5	(9)
Step three---is a restrictive provision `ancillary' to an otherwise non-restrictive agreement?	14	(6)
Step four---does the agreement or restriction have the object of restricting competition?	20	(3)
Step five---does the agreement or provision have the effect of restricting competition?	23	(6)
`Reduction of Intertechnology Competition'	29	(14)
Foreclosure Effects	43	(5)
Intratechnology Competition	48	(16)
Step six---does the agreement generate economic benefits?	51	(3)
Step seven---do the benefits `outweigh' the restrictive effects?	54	(3)
Step eight---are restrictive provisions `indispensable' to obtain the benefits?	57	(5)
Step nine---do consumers share in the benefits?	62	(1)
Step ten---does the agreement `eliminate' competition?	63	(1)
The Block Exemption, the IP Guidelines and the New Paradigm	64	(6)
Applying the New Paradigm in Practice---the Process of Self-assessment	70
Market Definition
Introduction	1	(2)
General Principles for Defining Markets in EU Law	3	(35)
The purpose of market definition	4	(2)
The analytical framework for market definition	6	(22)
Special issues	28	(10)
General Principles of Market Definition---Conclusion	38	(2)
Defining Markets and IP Rights	40	(27)
Product markets, technology markers, innovation markets	40	(4)
Defining downstream product markets where IP rights are involved	44	(9)
Defining technology markets	53	(11)
Geographic markets in IP cases	64	(3)
Assessing Market Power in Technology Cases	67
Market power in downstream product markets	69	(7)
Market power in technology cases	76
III. APPLYING THE METHODOLOGY TO AGREEMENTS UNDER THE NEW RULES
`Vertical' Agreements for Technology Transfer between `Non-competitors'
Introduction	1	(3)
When is a Licence Agreement Deemed to be between Non-competitors?	4
Applying the new paradigm to agreements between non-competitors	8	(9)
Analysis of specific restraints	17	(34)
Field of use and customer restrictions	51	(6)
Output restrictions	57	(3)
Captive use restrictions	60	(6)
Royalties	66	(7)
Tying and bundling	73	(9)
No-challenge clauses	82	(5)
Restrictions on development or use of competing technology	87	(8)
Improvements and grant-backs	95	(6)
Other ancillary restrictions	101
Licensing between Competitors
Introduction	1	(4)
Preliminary Issue---When is a Licence Agreed between `Competitors'---How do Different Competitive Relationships Affect the Competetion Law Analysis?	5	(4)
Applying the New Paradigm to Licensing between Competitors	9	(16)
Analysis of Specific Restraints	25
When is a licence agreement without restrictive clauses restrictive of competition?	26	(4)
Retail pricing	30	(1)
Royalties	31	(5)
Territorial restrictions	36	(14)
Output restrictions	50	(2)
Customers' restrictions	52	(4)
Field of use restrictions	56	(10)
Captive use restrictions	66
Cooperative Development and Exploitation of Technology---Standard-setting, Technology Pools, and Joint Research and Development
Introduction	1	(1)
Joint R&D and IP Licensing	2	(5)
The general approach to R&D cooperation under Article 81	3	(1)
Licensing and R&D	4	(3)
Standard-Setting	7	(24)
Background	7	(3)
Application of Article 81---the approach of the Horizontal Guidelines	10	(7)
Applying the new Article 81 paradigm to standard-setting	17	(4)
Standard-setting and IP rights---'FRAND' terms and disclosure or licensing obligations on participants	21	(10)
Technology Pools	31
Competitive harm in patent pools	32	(10)
Economic benefits and balancing under Article 81(3)	42
Technology Licensing and Article 82
Introduction	1	(2)
The Structure of Article 82 Analysis	3	(12)
Market definition in licensing cases under Article 82	6	(1)
Dominance in licensing cases	7	(6)
Abuse in licensing cases	13	(2)
Unfair Licence Terms (Article 82(a))	15	(5)
Unfair pricing or royalty terms	16	(2)
Unfair licence conditions	18	(2)
Discrimination	20	(11)
Dissimilar conditions	21	(1)
Equivalent transactions	22	(2)
Competitive disadvantage	24	(1)
Application to IP licensing---single firm dominance	25	(1)
Joint dominance	26	(5)
Tying and Bundling (Article 82(d))	31	(2)
Mandatory Licensing (Article 82(b))	33	(260)
Distinguishing between mandatory licensing and licensing as a remedy	35	(2)
Mandatory licensing and the general law of refusals to supply	37	(17)
Refusals to license---unresolved issues	54	(239)
Appendix 1: The main features of the new Technology Transfer Regulation	293	(8)
Appendix 2: Commission Regulation (EC) No 772/2004 on the application of Article 81(3) of the Treaty to categories of technology transfer agreements. (OJ L 123/11)	301	(9)
Appendix 3: Commission Notice on guidelines on the application of Article 81 of the EC Treaty to technology transfer agreements (OJ C 101/2)	310	(53)
Index	363