Author(s)
Christian Ahlborn, David S. Evans and Jorge A. Padilla
Source
Fordham International Law Journal, Vol. 28, 2005
Summary
This paper looks at the impact of competition policy on intellectual property owners in Europe.
Policy Relevance
Willingness to force intellectual property owners to license their rights risks discouraging innovation in Europe.
Main Points
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Owners of patents and copyrights may refuse to license rights to others. The owners keep the value from their innovation, encouraging more innovation.
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The European Court of Justice (ECJ) ruled that refusals are illegal only in ‘exceptional circumstances,’ when:
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The license is indispensable to the competing product.
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The grant of the license would introduce a new product.
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Failure to grant a license excludes any competition.
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In the Microsoft case, the European Commission did not use such rules, but said it would decide on a case by case basis.
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The ECJ’s rule is better, because it will maintain incentives to innovate and force licensing only when it would have clear benefits.
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Courts in the United States are more reluctant to use compulsory licensing than the ECJ.
